It’s been a fairly uneventful beginning to the year on the currency markets, with Sterling exchange rates against the Euro and the US Dollar moving heavily each day, yet by close of business we’ve tended to find ourselves back where we started.
GBP/EUR has reamined around the 1.16/17 mark, GBP/USD has held quite firmly at 1.23, and GBP/AUD around the 1.68-1.70 range.
This exchange rate behaviour is indicative of a market awaiting some very important news.
I hate to flog a dead horse for our regular readers by continuing to address the upcoming Supreme Court decision and the implications this will have for the Pound, but it is incredibly pertinent to anyone planning to buy or sell Sterling for a foreign currency. Not just over the next few weeks as we await the verdict, but over the next few months in the run up to the triggering of Article 50.
For those who are not aware, the Supreme Court is currently ruling an appeal of November’s Judicial Court decision to allow Parliament to vote on the enactment of Article 50 – the formal process to leave the EU.
As in November, financial markets should react well to the decision to involve Parliament in the Brexit process. The Pound’s value increases with investors gaining confidence that Parliament’s involvement will mean the Brexit process will be delayed to some degree due to cumbersome Parliamentary procedures, and that this increases the likelihood of a softer exit from the EU.
You can also argue that Parliament’s involvement means that the aims of the negotiations and how well they will progress will be much more public. This permits greater confidence to invest in the Pound as investors and financial institutions will have a greater understanding of what trajectory the UK economy, and therefore the Pound, will be taking in the medium-term.
The expectation is that the Supreme Court will uphold the initial conclusion of the Judicial court a few months ago. Based on November’s currency movements, this will likely cause 1-2 cent improvements on GBP/EUR, similar gains on GBP/USD, and likely larger positive spikes on GBP/AUD due to the volatile nature of the currency pairing.
The verdict is expected between the 12-17th of January, so if you are a Euro or Dollar seller, it may be wise to move ahead of this coming Thursday to avoid being caught up in any sudden and unannounced spikes in Sterling value when we are told the decision.
Furthermore, on Wednesday data sets for manufacturing and industrial sectors of the UK economy, and a first look at growth for the final quarter of last year, will be released in the morning for markets to react to.
The manufacturing sector has enjoyed a resurgence following the sudden devaluation of the Pound in June, and growth in the UK economy has shown on mutliple occasions since the June vote to Leave the EU to be resiliant to the economic shocks this had entailed.
So, in short, very good news is expected to be provided to Euro, US Dollar and Australian Dollar buyers in the short-term. Two major events are expected to make your transfers more profitable, which is why anyone looking to conduct a Sterling purchase, even over the next few months, should look to how you can secure these still historically favourable exchange rates before Wednesday.
If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well be worth your time getting in touch with me on firstname.lastname@example.org in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
I have never had an issue beating the rates of exchange on offer elsewhere, and these current exchange rates can be fixed in place for anyone wanting to prebook their currency transfer later in the year at current exchange rates.