Daniel Wright
Sales Director
UK and EU agree Brexit deal at long last
Sterling exchange rates rise on the prospect of a Brexit deal. Volatility expected ahead of key Brexit vote in Parliament on Saturday as Boris Johnson rallies support for his revised deal.
Request a quoteSterling has gained in value on the interbank market against many of its major counterparts this week, and hit multi-month highs versus the euro and US dollar yesterday shortly after the Brexit decision was announced.
In part, this is because the UK and European Union (EU) have at long last, after more than three-and-a-half years of, often strained negotiations, and three different British Prime Ministers (PM), finalised a Brexit deal.
In particular, UK PM Boris Johnson and European Commission President Jean-Claude Juncker announced the revised Withdrawal Agreement yesterday. Mr. Johnson tweeted that the deal means the UK “takes back control”, while Mr. Juncker stated that the deal “sought to identify a mutually satisfactory solution to address the specific circumstances on the island of Ireland."
This has strengthened sterling, partially because it seemingly removes the risk that there’ll be a ‘No Deal’ Brexit, in which the UK would have left Europe without any agreements or compensatory arrangements. Instead, the UK’s exit will be carefully managed, including a transition period through 2020.
UK House of Commons, EU Parliament must pass deal
However, it’s worth noting that, though the Brexit finishing line is in sight, we’re yet to cross it. One significant hurdle still to overcome is the fact that the Democratic Unionist Party (DUP) have announced that they won’t support the Brexit deal in its current form.
This is because Northern Ireland will effectively remain in the EU’s Customs Union to prevent a hard border on the island of Ireland. For the DUP, this would constitutionally separate Northern Ireland from the rest of the UK, so is unacceptable.
As a result, it’s unclear if Mr. Johnson will have the votes among MPs in the House of Commons to pass his deal, when he presents it at the extraordinary session this Saturday 19th. Meanwhile, the deal must also be ratified by the EU’s Parliament, although this looks likely.
UK unemployment rises, while inflation, retail sales steady
Turning to the UK’s recent economic performance, it’s been a somewhat disappointing week. To begin with, we’ve learnt that UK unemployment unexpectedly rose by +0.1% in the three months to August, to 3.9%. The UK has begun shedding jobs, it’s thought in part because of the Brexit uncertainty.
Elsewhere, UK inflation held at 1.7% in September, according to the Office for National Statistics, which was below the forecast of 1.8%, while UK retail sales last month were flat at 0.0% month-on-month. This could slow the UK’s economic growth in the future.
You may wish to speak to your account manager here at FCD if you have an upcoming currency transfer as sterling is experiencing increased volatility ahead of Parliament's Brexit vote tomorrow.
Read our monthly currency forecast
Download hereNews
L. Aldred
UK
I have used Foreign currency direct on two occasions, both were stressful times for me but Daniel and staff were wonderful. Every step was explained and all queries answered fully and swiftly. I would not hesitate to recommend to anyone for an excellent service.
E. Godwin
Australia
I decided to use this company after reading many blogs by Daniel Wright on the forecast of Sterling. He always seemed to get his predictions right and also seemed to have not only very good knowledge but a passion for the industry he is in. Daniel was not only informative but patient and gave us options on the lead up to our currency exchange.
H. Taylor
France
I only have praise for the way this company make the stressful experience of Forex a simple process. Difficult to be specific but there is always the personal touch. Recently, with the BREXIT hysteria the dealers must have been very busy but Daniel Wright was always available or never failed to ring me when requested.
J. Warnes
UK
A totally reliable and trustworthy service. I have used them on three occasions now and my money has always come over on the agreed date at the agreed rate. Daniel Wright is a pleasure to deal with -patient, personable and professional.