Sterling exchange rates have started to climb once more but is this a short term lift up?
With all the talk and debates plus the political fall out and economic concerns Sterling rates have been falling over the last week, but one week on the FTSE is actually higher than it was before the LEAVE result. Currency markets have unfortunately not shown the same gains but are higher than the bottom levels seen at the beginning of the week. GBPEUR levels are now over 1.21 a cent higher than yesterday morning when there was a real threat of markets falling under 1.20.
The BREXIT doom and gloom has been strong out there but please remember that these rates are actually a lot higher than many had expected. Some banks suggest parity on a leave which is a distant from where market levels sit this morning. In fact the average rate seen over the last decade is only 4 cents higher than where we stand now, not bad considering the talk of the UK falling apart and the EU concept under stress.
The British divide
As the ramifications of the LEAVE result starts to take shape it seems clear that some parts of the UK are wanting to remain as part of the EU. Northern Ireland, Scotland and Gibraltar have already made their claim.; All had rather large REMAIN results from the vote only 1 week ago so perhaps this is no surprise. If this story develops watch out for significant fluctuations on the currency market as the Pound takes a dive. I can certainty see these questions lasting a while as the uncertainty remains. Make sure to contact us here if you would like more information, with over 17 years’ service we have helped clients through many major events like this. In each occasion helping them save money, simply put if that was not the case we would not be in business. Contact myself STEVE EAKINS at [email protected] if you would like more information.
Why are rates so high?
Well the concerns stand around contagion and the risk of further right wing parties across Europe taking hold. Plus the fact that UK is the third largest contributor to the EU raise concerns about what the EU could look like without the UK being part of it. These questions are rather large and the implications on the currency market could equally be as big. Answers to these questions however are probably at least 6 months away as the UK decide political leadership, then issue the Article 50 which starts the ball rolling on the negotiations of the leave and therefore what Europe will look like thereafter.
Lots of questions remain about what the future will hold but it is incredibly unlikely that these will be answered within the next 3 months. Therefore rates are expected to remain under threat with GBPEUR rates especially volatile. If you are buying a house in Europe a boat or indeed emigrating these events are unlikely to impact the rate of exchange you achieve if moving within the next three months.
If you would like more information please feel free to contact myself STEVE EAKINS – email me at [email protected]