The pound has rallied higher today against nearly all of the major currencies with good gains against both the Euro and US dollar. Rates for GBP EUR are moving closer to 1.14 whist GBP USD has touched 1.40 earlier today. The surge in sterling has come about following yesterday’s government meeting at Chequers which supposedly found unity within the government on its approach to the upcoming Brexit trade negotiations.
Reports are suggesting a slightly softer Brexit with no customs union which the markets are taking positively and has helped lift sterling. More will be offered next week in what will be a very politically heavy week for sterling exchange rates. Both UK Prime Minster Theresa May and Labour party leader Jeremy Corbyn will be making speeches starting with the labour leader on Monday.
How will the Theresa May speech impact the pound?
Theresa May is reportedly going to make a speech next Friday detailing the strategy for Brexit and will confirm whether Britain will leave the EU’s Customs Union. The Labour party have signalled they want to remain part of the customs union and there is pressure on the government form rebel conservatives to stay within. The Labour party are steering towards another general election rather than a second referendum and any vote which does not pass through the House of Commons could see a huge amount of political instability which could prove negative for the pound in this scenario.
It hasn’t been a great week as far as UK economic data is concerned so it is a relief for buyers to have seen a pick up on the more upbeat tome coming out of government. UK unemployment actually rose for the first time in two years after a very successful run of falling unemployment. UK GDP for the last quarter was also revised own once again taking the shine of sterling and highlighting that the economy is still in a delicate state. Economic data is lighter next week for the UK so focus will largely revolve around the Theresa May speech.
It is worth highlighting that at the Lancaster House speech that she gave in 2017 the pound rallied by almost 2% creating an excellent opportunity for clients looking to buy Euros. Clients looking for an opportunity could see a repeat here and a short lived window to buy ahead of the official trade negotiations which will commence in March. Do get in touch to discuss the best strategy to try and make the most of such opportunities.
Political news drives the market as much as economic data in these times especially when it comes to Brexit. To discuss your own requirement and how these changes are likely to impact on your own currency transfer then please contact me at firstname.lastname@example.org