The pound is in for a very volatile ride over the next few weeks as Article 50 now rapidly approaches after 9 months since that referendum 23rd June 2016.
Everybody wants to know what will happen once Article 50 has been invoked now that the date of next Wednesday 29th March has officially been set. Before this date though we are awaiting news from the Scottish Parliament after a vote on whether or not to hold a second Scottish independence referendum. This was to be held at 17:30 today but the terror attack outside Westminster Palace today has seen the vote postponed.
The Scottish vote is important as it will dictate the direction of the Scottish Nationalist Party which could have some impact on the Brexit negotiations. My view is that little will change as UK Prime Minister Theresa May has made it abundantly clear that there will not be a referendum before Britain has left the European Union.
Once Article 50 is invoked there is a chance that the markets may breathe a sigh of relief and the pound could in fact strengthen. My view is that 9 months on from that vote to leave the EU and the markets are now looking for clarity and in one sense invoking Article 50 will be a step in the right direction to providing some of that clarity as negotiations will finally commence. Had this been invoked several months ago at such an early stage then the pound would probably have weakened amidst all the uncertainty. At this point though my view is optimistic for sterling exchange rates.
Of course this has never been done before and there are substantial risks but there is a chance that for those clients holding sterling that they may see some better buying opportunities. I would stress that any gains are likely to be short lived as the negotiations when they do start, which will probably be in May, will still take a huge amount of time and hence uncertainty will still be there.
Those clients looking to buy Euros or who are buying Australian dollars in particular could see a window of opportunity next week and the rates have been very well supported over the last seven days for both currencies. In these markets it is really about looking for those short term opportunities which do present and being ready to move quickly when the numbers look good. This is something we can help you with. Next week could see major volatility after what will be a very major announcement from the British Prime Minister. The best thing is to get in touch well before the event to have things in place ready.
If you would like further information on sterling exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me directly on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on email@example.com