Sterling has spiked against all the major currencies over the past 24 hours, following the High Court’s ruling over the UK’s Brexit decision.
The ruling stated that the government must seek parliamentary approval before they can trigger Article 50, which will formally start the process for the UK to leave the EU. This sent shockwaves through the markets and the Pound benefitted as doubt was thrown over how and when our Brexit may happen.
The general feeling is that the decision will not alter the final outcome but what it will do is put pressure on UK Prime Minister Theresa May to be more transparent in terms of what she wants to achieve for the UK in terms of prospective deals with the EU and this in turn could lead to a softer Brexit than we initially thought.
Those clients holding the Pound have been given an opportunity to trade at almost two cents higher against both the EUR & USD. This could well be another false dawn as in my mind nothing has really changed in terms of the general economic outlook and the UK will continue to struggle over the coming months until a clear strategy is in place to move the economy forward.
The news did not stop there, as it was followed by arguably the month’s biggest economic data release in the form of the Bank of England’s (BoE) interest rate decision, their latest minutes and BoE Governor Mark Carney’s subsequent press conference.
Whilst interest rates were kept on hold at 0.25% as expected, Carney’s subsequent address was more upbeat than he has been of late and this helped to solidify the Pound’s position during the early part of his speech. This good feeling was diluted slightly however, as he mentioned the central bank were open to a further rate cut and an increase in their monetary policy (QE) programme if they felt it was necessary to support the UK economy.
Personally I still have little faith in a sustainable Sterling recovery under current market conditions and as such would look to protect the gains made over the past 24 hours, rather than gamble on what has become an increasingly volatile and unpredictable market.
If you have an upcoming Sterling currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.
If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on email@example.com