Sterling exchange rates remain incredibly changeable. A majority of the driving force for the value of the UK Pound is coming from both politics and Brexit negotiations with the market remaining incredibly reactive to updates. More information on the upcoming Bank of England discussions and economic data coming about amid Brexit uncertainty in today's Sterling report. The table below shows the range of exchange rates for a number of currency pairings, and the potential difference you could have achieved when selling £200,000.00 during the high and low points for the past month.

Currency Pair% ChangeDifference on £200,000
GBPEUR2.2%€4,700
GBPUSD2.7%$7,200
GBPCAD3.0%CAD $10,000

Currently Brexit talks are due to be concluded by November but traditionally political negotiations do not conclude early, as a result most don’t expect an exact deal to be made until the eleventh hour. Saying that however new commentary from the key members of the Brexit deal in resulting in swift changes in the Pounds value as the changing likelihood of what the deal will look like evolve.

For example, on two occasions over the last 10 days we have seen Sterling’s rate SPIKE. Last week we saw the biggest daily gain for the Pound in over 3 months as a result of a no-deal becoming less likely, and on Wednesday rates moved by over a cent in less than four minutes on a suggestion that Germany had backed down on key negotiation points.  This however was later retracted by the Government in Germany which resulted in rates falling back down. To highlight the financial impact, delaying a £200,000 transfer into EUROS by 5 minutes on Wednesday could have given you an extra €2,000 so keeping a close eye on market movement is key to achieving the most for your money.

Economic data this week

Brexit and political conferences could move Sterling

Moving forward most expect the political horizon to continue to change as most Governments have only just returned from their summer breaks.  Later in September we also have domestic political conferences for both the Conservative and Labour parties.  Both parties are in bitter internal arguments and these meetings are the last before Brexit should be concluded, meaning that if there was to be any change in leadership of either party this would be the platform for change to be announced. This is certainly something to be very aware of as any change in leadership at this late stage of negotiations could have a big impact on the value of the Pound, potentially in a negative way, making things more expensive still.

Bank of England meeting one to watch for Sterling clients

Outside of politics the value of the Pound will also be set by its economic performance.  Today we have the release of housing data and some inflation indicators, both are expected to show a contraction so I expect the value of the Pound to end the week lower than this morning.

Next week we have key Manufacturing data released on Monday, along with Trade and GDP figures, Tuesday we have Unemployment data for the UK and Thursday the next Bank of England meeting and interest rate decision.

Generally, Monday’s data is expected to show a contract, and Unemployment data on Tuesday an improvement. Thursday will be interesting as we get the latest update from the Central Bank on their forecasts for the UK economy moving forward.  Personally, I see Sterling rates remaining under some considerable pressure and for rates to remain at these near multi year lows against most currencies, with any movement to probably be down rather than up.

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.