Sterling has started the week off on the back foot and was the worst performing major currency yesterday losing approximately 2.5% against the G10 currencies. More on the reasoning behing this in today's Sterling report. The table below shows the difference in return you could have achieved in a number of currencies when selling £200,000.00 during the high and low points of the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBPEUR1.66%€3720
GBPUSD3.32%$8580
GBPAUD2.64%AUD $9260

The decline in sterling comes after Liam Fox over the weekend warned that he believed there is a 60% chance that the UK will leave the EU without a deal, which has forced investors to sell of their Sterling positions throughout Monday. In addition the trade secretory tried to calm the markets yesterday when he spoke about the Trans-Pacific Partnership (TPP). Since the Chequers proposal, rumours have emerged that the current UK-EU proposal would stop the UK from joining the TPP. Mr Fox stated that he met with Japan’s Prime Minister Shino Abe during his holiday and the Japan PM offered his full support. However the Pound still continued to fall throughout the day.

UK economic data to look out for this week

It’s a fairly quiet week for sterling economic data releases. The important day is Friday when the UK will release their latest quarter2 Gross Domestic Product numbers. Gross Domestic Product also known as GDP measures the growth of the economy. The prediction is for GDP to fall to 0.1% from 0.2% which could force the pound lower against most major currencies.

Is there scope for amendments to the Chequers Plan? UK Prime Minister, Theresa May has rejected the idea of a second referendum despite increased calls for one, especially now that the plan for it appears unclear. She’s held strong regarding her plan, which is labelled the ‘chequers plan’ and she will be encouraging other EU leaders to support her plans whilst in Salzburg, Austria over the next few days at the EU summit. She’s faced criticism and there are up to 50 members of her own political party that aren’Is there scope for amendments to the Chequers Plan?yed her.

Should I buy my foreign currency now?

For clients that are purchasing euros short term for a property purchase, there is a strong argument to think about purchasing your euros sooner rather than later. Last week the Bank of England raised interest rates, and the pound still lost value as the Governor of the Bank of England Mark Carney talked down the pound shortly after. UK GDP remains extremely low in comparison to other leading nations, for example the latest US GDP was released at 2%. Finally Brexit negotiations will continue to weigh on the pounds value until we receive some clarity. With the UK and EU planning to secure a deal by October, I don’t see a deal being reached anytime soon therefore with each negative news article that is released you would expect the pound to fall further.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.

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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.