The UK election has confirmed the almost unthinkable a few weeks ago. Not only did Theresa May fail to increase her majority, she has found herself short of one and sterling has reacted accordingly. The overall position is now looking increasingly uncertain with most commentators expecting that sooner or later Theresa May will be forced to resign. With no clear majority government being yet confirmed by Theresa May, her, and with it, the UK and sterling’s position is looking more and more dire.
This is great news for clients looking to buy the pound but presenting fresh headaches for clients buying a foreign currency with the pound who did believe the rates were not going to drop much further. With the prospect still of a Jeremy Corbyn Government and even another election markets are now in wait and watch mode to find out what happens next with the UK politically and also the pound.
I cannot see how the pound won’t drop further since this uncertainty is weighing heavily on the market. Business confidence has plummeted and so has consumer confidence and spending. With wages failing to keep pace with Inflation the outlook remains extremely uncertain and the deterioration in the UK is I believe highly likely to continue.
If you have a transfer buying or selling the pound this week is crucial to establish whether or not the recent trend was short-lived or whether it will now bounce higher. If you have a transfer to consider then understanding the market and all of your options well in advance is the best way to limit your exposure.
A well placed Limit order could be the perfect antidote to the current malaise in sterling. Such orders allow you to trade at an improved level should it become available. So for example if you wish to buy Euros at 1.15 we could put a Limit order in at this level. If you want to sell US dollars at 1.25 we could put an order in at this level.
As well as provide expert guidance on the market and potential outcomes we can also offer a proactive service to monitor the market and contain the volatility. For more information on the market and our services please contact me Jonathan Watson by emailing firstname.lastname@example.org.
Thank you for reading and I look forward to hearing from you.