As covered so well yesterday by my colleague Joseph Wright, the customs union, and more importantly whether we remain within the customs union or not, is quickly becoming the biggest talking point of the week so far and the biggest mover of Sterling exchange rates.
In fact, the latest Brexit debate would have meant clients buying at last week’s high compared to this week’s low would have meant an extra €4460 and $8000 on a typical £200,000 transfer. This is reflected in the table below:
|Currency Pair||% Change||Difference on £200,000|
The government now has the difficult tasks of keeping everyone happy. Last week’s defeat in the House of Lords meant that the government would now have to outline the reasons for staying in the customs union.
Pro-Brexiters quickly warned Theresa May that any U-turn could spark a political backlash. As Downing Street delivered the news on Sunday, Sterling’s value dropped.
The value of the pound now hangs on future debates regarding the Customs Union, with crunch talks starting tomorrow. Prime Minister Theresa May has the difficult task of keeping everyone happy.
Leaving the customs union altogether is effectively a hard Brexit and as we have seen too many times in recent months, any hint to this and the pound will likely drop.
UK business, opposing political parties, the Irish border problem and the EU are all pushing for the UK to remain within the Union – if she agrees, she could potentially face expulsion from her own party which could create political uncertainty and harm the pounds value. Leaving the customs union altogether is effectively a hard Brexit and as we have seen too many times in recent months, any hint to this and the pound will likely drop. The outcome will be key for the Pound’s value in the up and coming weeks and not one that clients want to miss – get in touch to keep informed.
With no major economic releases this week until Friday, the UK’s better than expected public sector net borrowing figures took the headlines yesterday. The budget deficit dropped to its lowest level since 2007 and could pave the way for public services spending at some point this year.
Whilst I predict that Sterling’s value is very likely to be determined by Brexit developments, Friday’s Gross Domestic Product figures could also carry significance. A question mark remains over next month’s Bank of England Interest rate decision due to an apparent slow down within the UK economy, with inflation slipping off last month. Poor UK GDP data could cause further uncertainty and create an even more difficult for the Bank of England to answer.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353.
All the staff I spoke with were helpful ,courteous and knowledgeable. The service is efficient and FCD make the exchange process hassle free.
Personal, attentive. What more can I say? First Rate.
Efficient, friendly, personable – I have used this service several times and will not hesitate to call on them the next time a foreign currency transfer is required.
Quick, competent and friendly: a reassuring excellence of service, which I heartily recommend to every potential client.