The Pound continues to take losses as Brexit uncertainty drives the Pound lower with GBP USD reaching a 12-month low. Despite the current Parliamentary summer recess, the Pound has been heavily impacted by political commentary this week. More information on how political uncertainty seems to be outweighing economic updates in today's Sterling report. The table below shows the range of exchnage rates during trading yesterday, highlighting the importance of timing your transfer to maximise on your return.
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Although the market reaction was limited following Mark Carney’s comments last week, the markets have paid more attention to Trade Secretary Liam Fox’s comments over the prospect of a no deal Brexit outcome. His suggestion that there is now a 60% chance of a no deal have helped see the Pound tumble across all of the major currencies this week and there may be more losses to be seen.
The House of Commons returns 4th September following which should make for a very volatile period for Sterling exchange rates as pressure mounts to finalise the withdrawal agreement expected in March 2019. Although there has been some softening in stance from the EU it is widely expected that there will be further changes to the British proposals ahead of what could be an important summit in September. There are then two further summits in October and December when the pressure on reaching an agreement is likely to be even greater and leaves a window from now until the New Year of heightened volatility for the Pound.
Clients with pending requirements would be wise to get in touch at this stage and consider taking the risk out of the currency as we reach the end of this part to the Brexit negotiations, the outcome of which remains unknown.
With no UK economic data releases today focus moves to tomorrows UK Gross Domestic Product (GDP) figures where a small decrease is expected. The warmer weather in the second quarter may have helped to increase economic activity although it is true that this year has seen some economic activity actually hampered whilst Brits have chosen to make the most of the rare hot weather rather than shopping on the high street.
A weak number tomorrow would likely see the Pound fall further although a surprise pick up cannot be ruled out with the help of warmer weather in the second quarter, bearing in mind the record breaking UK temperatures seen in June. The National Institute for Economic and Social Research (NIESR) also releases its own GDP forecast tomorrow for the last three months and could help soften the blow if the official data does see a drop.
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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