Sterling has rallied this week, moving through 1.19 against the EUR at the high and up towards 1.26 against the USD.
GBP/EUR levels hit the best levels we’ve seen in 2017, as some of the uncertainty and fear regarding the UK’s upcoming Brexit was removed.
It looks as though the House of Lords will ratify the House of Commons decision regarding the triggering of Article 50 and with the government confident this will be in place to initiate next month as planned, the markets have taken it as a sign of strength and the Pound’s value has been boosted as a result.
Much of the current market sentiment is being driven by how the UK economy will perform over the coming months. Whilst Sterling has certainly gained a foothold following its downturn, there are still many unanswered questions regarding how we will facilitate our exit from the EU and what deal will be in place once we do?
There has already been some concerning figures mentioned by the European Commissioner, who stated that the UK will be penalised 50 billion for leaving the single market. This is hardly news which is likely to boost investor confidence in the UK economy moving forward, so the recent upturn should be headed with a word of caution.
Therefore the current levels may be slightly distorted and at least in part a result of pressure that has bene building on the EUR and to some extent the USD.
The Eurozone is facing something of a political crisis and with key elections in France, Germany and the Netherlands and support for far right parties in each of these countries, it is clear that all is not well inside in the EU. As the UK’s unexpected decision to leave the EU has proved, along with the appointment of President Trump, the expected result does not always come to fruition and it is clear that some people are searching for change.
Despite Sterling’s improvements this week, the UK economy still remains extremely fragile in the eyes of investors and as such I would be wary about gambling on further sustainable improvements for the Pound. I have suggested over recent months that my clients look for short-term currency exchange opportunities and despite this week’s spike my opinion remains the same.
If you have an upcoming Sterling currency transfer to make and are concerned about the current market instability, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact us on 0044 1494 725 353 and ask one of the team for Matt.
Alternatively, I can be emailed directly on [email protected] and can answer any queries you have about the current market trends & forecasts.