The pound continues to find itself in uncertain waters as Brexit moves into the final stages to conclude the withdrawal agreement. More information on the Salzburg summit and the potential ramifications on sterling exchange rates in the market report below; the following table shows the range of exchange rates for a number of currencies throughout trading hours yesterday and the difference in return you could have achieved when selling £200,000.00.
|Currency Pair||% Change||Difference on £200,000|
The pound was boosted this week after reports emerged that EU Chief negotiator Michel Barnier may have slightly softened his stance on the Irish border question with plans now being considered by the EU to minimise physical checks at the border. Last night he said the EU was ready to improve its offer although he reiterated the need for a backstop guarantee. Whilst the pound does remain on a weaker footing these kind of murmurs when they come about are providing small rallies for the pound.
The first of three EU summits starts today in Salzburg where Brexit will be discussed in detail and we will inevitably hear more soundbites from both UK and EU leaders. This first summit is being described as an informal meeting and it is expected that an extraordinary summit will be officially announced to take place in November.
Both sides have confirmed that they are happy for negotiations to roll on into November which still leaves a highly fraught next couple of months with a high degree of uncertainty for sterling exchange rates.
The Conservative Party conference which is being held in Birmingham 30th September is also approaching and how this week’s summit unfolds could determine the future for the Prime Minister. Theresa May has made clear that if the Chequers plan is voted down in parliament then there is likely to be a no deal Brexit. The Prime Minister will need to face down the reported fifty or so politicians within her party whom have said they will vote down the Chequers proposal. A positive summit this week could give Theresa May something to take back to the conference at a time when opposition to Chequers is strong. This could provide a spike higher for the pound if the outcome is encouraging. These two important events are likely to shape the future path of Brexit which should result in considerable volatility for the pound.
The TV coverage from Mondays Panorama special on BBC 1 which gave a glimpse into life in Westminster highlighted how difficult the position is for Theresa May in terms of trying to find a deal that will be acceptable to the EU but also one that her government will support.
UK Consumer Price Index inflation data is released this morning at 09:30 where a small decline is expected in the numbers. Whilst the rate of inflation is being closely monitored by the Bank of England the numbers are unlikely to warrant a rise in interest rates until after Britain’s departure from the EU next March. The data this week including retail sales tomorrow will more than likely be overshadowed by Brexit developments this week.
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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