The pound had a volatile day yesterday, oscillating between 1.0892 and 1.0966 on the interbank GBP/EUR exchange rate. The late afternoon recovery followed signs that Angela Merkel might support changes on the Irish backstop.

Sterling had fallen in yesterday morning’s trading, on the initial feedback from the EU that Boris Johnson’s wishes to amend the Irish backstop were unworkable.

Boris Meets Merkel today in Berlin and then Macron Thursday, yesterday’s volatility is a reminder of the delicate nature of Brexit and how sensitive the pound remains. These meetings have the potential to yield more headlines on Brexit, which we know can influence the pound.

Sterling has now recovered back from many of the lows of the last few weeks and at the time of writing is up 2.81 % against the euro, up 1.03 % against the USD and 1.89 % up against the Australian dollar on the interbank exchange compared the lows on these pairings over the last 3 weeks. To keep abreast of any future short sharp movements, you may wish to make your account manager aware of any future sterling currency transfers you might be considering so we can alert you to changes.

On Wednesday it was announced that the UK has now spent a record £8.7bn on interest.

What else lies ahead for sterling?

Today’s UK economic data is the latest Public Sector Net Borrowing data, released at 09.30 am. Government borrowing has decreased in recent years, and sterling rates could be influenced by any shifts in the data released.

With a light economic calendar this week for the pound, there are other considerations ahead for the currency. Regarding a General Election, betting website puts the probability of a general election in 2019 at between 66% and 80%. Historically speaking, we know the uncertainty of a political situation like an election can see the pound lower, as it has done ahead of the last 3 General Elections in 2010, 2015 and 2017.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.