Within my recent article published on the 3rd December, my thoughts were that this week would be an extremely volatile week for sterling exchange rates and the markets haven’t disappointing. The pound made substantial gains against all of the major currencies throughout Monday morning and early afternoon. Reports were suggesting that the UK and EU were close to agreeing the three key topics which would pave the way for trade talks early next year.
However a press conference by Theresa May and a statement by the DUP confirmed the UK still need to overcome the Irish border problems before trade negotiations begin. My opinion has not changed I still believe the UK will paper over the crack (Irish border in this instance), and therefore an announcement will be released in the upcoming week confirming trade negotiations will begin early next year.
It is likely the announcement will be made at the EU summit on the 14th and 15th December, therefore if you are buying or selling the pound short term formulating a plan now is your best option. If I were buying the pound over the next three months, I would be making arrangements now as I believe a period of considerable sterling strength is on the horizon.
Clients buying sterling are still receiving what I like to call the ‘Brexit discount’. Did you know on a €200,000 transfer now compared to Pre Brexit levels you are receiving an additional £25,000.
For clients that are transferring a foreign currency into the pound but are awaiting for their foreign currency to become available, an option available is to use a forward contract. A forward contract allows clients to secure rates now and pay later for it.
If you are making a currency conversion in the upcoming weeks or months and want to save money on exchange rates, I would recommend emailing me with the currency pair you are converting (GBPEUR, GBPUSD) the reason for your transfer (business transaction, property purchase) and the timescales you are working to and I will respond to your email with my forecast and the process of using our company firstname.lastname@example.org.