It has become quite clear that with only 2 days prior to the Referendum, the bookmaker’s odds of a Brexit are currently playing a huge part in Sterling strength. Investor confidence in a Remain is growing and Sterling is rallying against a number of major currencies.
But let’s be clear, rates are volatile and although we are seeing an uptrend throughout the early hours of this morning, caution should be exercised as we approach Thursday’s historic event.
We only need to look at trading yesterday to know just how quickly the market moves, between 5-5:10pm GBPEUR fell over half a cent then recovered 30 minutes later, the same was observed for GBPUSD. These spikes and falls in rates are premature signs of what to expect in the event the UK withdraws from the EU.
The big question remains as to whether making an exchange now would be worthwhile or holding on to the results of the Referendum in the hope that the UK remains, this of course – is a huge gamble.
On the flip side, buying this side of the EU Referendum may also present another gamble, if you’re looking to emigrate and buy a property within the EU for example, you may now be faced with uncertainty over your rights, or concerned with additional taxes and surcharges. Having the better exchange rate may give you more Euro’s now, but render them totally useless in the event you opted out of a purchase due to a Brexit.
It’s generally accepted that a Remain vote will boost Sterling potentially into the mid/late 1.30’s and this of course would be the ideal circumstance for our clients and those looking to invest within Europe. If the pollsters and bookmakers have it right, this will be the likely outcome on Friday.
But as we’ve learnt from the past, polls are not always indicative of final results, we only need to look at the Scottish Referendum to know that the polls were incorrect, and bookmakers don’t always get it right either so remain cautious of any poll suggestions.
If you have a currency transfer to make for a property of business transaction, buying this side of the Referendum could well be a good idea given the recent rally in the Pound. I would not expect these rates to remain if polls or bookmakers change their odds in favour of a Brexit over the next few days.
I must also reiterate that Pound Sterling will most likely drop significantly if a Brexit materialises, please consider this when making a timed transfer.
If you are in the middle of buying or selling a property overseas or if your business has upcoming requirements then you need to make sure you have a proactive broker on your side. There are options available to you including limit orders, stop losses and forward contracts, all of these can help you minimise your currency risk in this difficult market.
We here at Pound Sterling Forecast all work for one of the largest currency brokerages in the U.K with access to exceedingly competitive and rarely beaten rates of exchange, along with awards for our customer service. If you feel that we may be beneficial to you then feel free to get in touch with me (Daniel Wright) the creator of this site many years ago and I will be more than happy to help you personally. We deal with bank to bank transfers ranging from £1000 to multi-million pound exchanges and will be able to explain all of the options to you in clear and easy to understand terms. Email me today email@example.com with a description of what you need to do and a contact number and I will contact you at the earliest opportunity. You can also call our trading floor hotline during trading hours on 01494 787 478.