The pound has seen a good day against nearly all of the major currencies with gains over 0.5% against the Euro and US dollar. GBP EUR has broken above 1.17 for GBP EUR this afternoon whilst hitting 1.26 against the US dollar.
Despite the uncertainty in the run up to the Supreme Court ruling there is now some clarity being offered as to how Brexit will take place. This is reassuring the markets to a degree and provides a confidence boost for the pound. Politics are still very much at play however and a question mark still remains as to how close Britain will be to the single market. This issue and whether Britain is ultimately in or out is one of the main drivers for the price of sterling. With the deadline of 31st March within sight now there is likely to be added volatility for the pound and in my view some serious risks in the coming weeks. Brexit is unchartered territory and it would be unwise to expect no glitches. Although the pound has recovered from those recent lows, Brexit still poses a risk for the pound, in the short term at least anyway.
GBP USD Impact – Trump Administration
This Friday sees UK Prime Minister Theresa May visit US President Donal Trump for the first time and where a trade deal is expected to be discussed that will reduce barriers and tariffs. There is likely to be intense press coverage of this meeting under the circumstances and no doubt some tweeting opportunities from Donald Trump which could shape the markets.
I am of the opinion that the dollar is at a key turning point and we may see a reversal of its strong position. The dollar is now moving further away from those 31 year highs against the pound so those clients looking to sell dollars may be wise to consider moving sooner rather than later to avoid disappointment.
GBP AUD – Trump Impact on Australian Dollar
The Australian dollar is in for a rocky ride these next few months and much of the direction will come from what happens in the US. President Trump has just abandoned the Trans-Pacific Partnership (TPP) of which Australia was one of the signatories. The Aussie dollar is impacted by events in the US so in these times there is likely to be a lot of volatility in the coming weeks and months. Clients either buying Australian dollars or selling Australian dollars would be wise to get in touch to try and maximise on the opportunities as they happen.
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