The Pound has come under fresh selling pressure following the resignation of two key pro-Brexit cabinet members in Theresa May’s Government. The Sterling report below looks into the potential impact of this fresh uncertainty in UK politics, the table below shows the range of exchange rates between GBP and a number of other currencies throughout the past month.

Currency Pair% ChangeDifference on £200,000
GBP/EUR1.93%€4,360
GBP/USD2.92%$7,681
GBP/AUD2.45%AUD $8,607

The resignation of David Davis and then Boris Johnson has seen the Pound lose value against all currencies and makes for a whole new set of questions as to what happens next.

Prime Minister Theresa May is currently ‘clinging to power’ according to reports. On Monday, it emerged that she had survived two votes on the customs bill and faced backlashes from pro-Brexit members of her own cabinet after they felt she caved into demands. The political pressure is not about to let off as parliament yesterday debated on trade and how this should look after the UK leave the EU. Theresa May managed to survive a bold bid from Tory rebels yesterday to create a customs union with the EU if the trade deal failed. Conservative MP’s were warned yesterday that if amendments to the trade bill were voted for, this could have led to a vote of no confidence for the PM and potentially an early general election.

There are now numerous outcomes that can be tabled including a vote of no confidence from her own party, the possibility of Jeremy Corbyn getting into power and the resurgence of Nigel Farage who has promised to get back into politics if Brexit looks like it will not happen.

Another possible outcome is the cancellation of Brexit altogether with some commentators suggesting the removal of such key figures as Boris Johnson and David Davis from the current front line of Brexit makes it less likely it will ever happen at all.

With such confusion comes volatility on exchange rates and any clients looking to buy or sell the Pound should be making real plans and ensuring they have highlighted any potential positions to our team to help keep them updated.

Other news to move sterling exchange rates

This morning at 09.30 am is the latest Industrial and Manufacturing Production data which will be secondary to political news but could effect shorter term movements for the pound. What I feel could most interesting on the economic data front today will be the NIESR (National Institute Economic & Social Research) GDP (Gross Domestic Product) estimate in the afternoon. With the Bank of England linking the raising of interest rates to economic data, investors will be closely poring over the data for positive news.

Theresa May also has a series of important events coming up including a Nato meeting in Brussels tomorrow and Thursday’s release of a long-awaited government White paper on Brexit outlining further detail on the UK Government’s position. Next week Brexit talks are back on the agenda and if you mix in Donald Trump's visit to the UK we now have a series of events could see a very turbulent time for GBP rates.

With England gearing up for its first World Cup semi-final in 28 years, the national mood is buoyant and I would hope this could trump the negativity from politics. Any good news on the pitch could also be reflected in the value of Sterling owing to increased Retail figures and better consumer confidence data which would help support a Bank of England decision to raise interest rates, thereby strengthening the Pound.

Any clients with a Sterling position buying or selling, should I believe be making very careful plans at the moment. Hanging on and hoping for the best is not often a good strategy on the currency markets, by working with us to best understand the latest news and highlight your options, we can work together to maximise the position.

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.