Yesterday’s horrific terror attacks in London were a stark reminder to all of the dangers a current democratic society faces. Our thoughts are with the victims and their families in this difficult time.
The shocking incident immediately caused the markets to panic and Sterling lost value against all the major currencies as news of the attack came in and the story unfolded. Despite an initial back-lash, the markets steadied themselves and the Pound did recover towards the end of European trading.
The markets were already showing signs of anxiety ahead of the terror attack, as the Scottish were casting their cotes on whether momentum for a second Scottish referendum could be carried through the first official phase. Whist the initial count looked as this was likely it has now been delayed due to yesterday’s events in the capital.
The Pound had gained a foothold earlier this week following UK Prime Minister Theresa May’s announcement that the Brexit bill will finally be invoked next Wednesday March 29th, which will officially start the process of our separation from the EU. Despite so much negativity around the subject over recent months the markets actually reacted positively to the news and the Pound gained value as a result.
Regardless of personal opinion I feel the markets will be somewhat relieved when this bill is invoked, as it will remove any remaining uncertainty surrounding the issue. Yes, we still have a long road ahead but hopefully as we move beyond next Wednesday the markets will refocus and assuming there are no nasty surprises around the corner, the Pound has far more chance of a sustainable recovery in my opinion.
GBP/EUR rates have moved back through 1.15, with GBP/USD rates moving back above 1.25 at the high.
Personally, I still feel this spike will be unsustainable for the time being, as we may find a negative reaction during next week when the bill is actually triggered. Therefore I would be very tempted to take advantage of the current spike, as my opinion remains that those clients holding Sterling should be looking at short-term opportunities rather than holding out for longer-term gains.
Either way it is going to be an interesting few months as the UK economy moves into a new phase of its history and I personally, would not be prepared to gamble on such an uncertain and increasingly unpredictable market.
If you have an upcoming Sterling currency transfer to make, then we can help you navigate this turbulent market by keeping clients up to speed with all the latest developments regarding Brexit and beyond.
If you would like us to monitor the market for you ahead of a currency exchange, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on 0044 1494 787 478 and ask one of the team for Matt.
Alternatively, I can be emailed directly on email@example.com.