The two biggest difficulties on exchange rates are the lack of absolute predictability on the movements and the speed at which things can change. Tomorrow Theresa May will give a speech that could easily trigger rapid and unexpected movements on sterling exchange rates, in January sterling rose about 2% on her speech, last October it dropped 3%! This can create really good opportunities or headaches for clients depending on which way they go. Preparation is key and to help manage the volatility we have a number of tools to help you manage the situation.
Theresa May will give a speech on Brexit in Florence, Italy, the timing of which is unclear but keep in touch with us here for further news. There is a belief the pound may rise since she is predicted to perhaps indicate that the UK will pay some form of Brexit ‘exit’ bill. This implies the UK will be seeking to retain access to the Single Market which would be sterling positive. However if the speech indicates a lack of unity and hints at the UK being more prepared to leave the EU with on deal, sterling will lose value.
As if this issue was not enough we also have the German election on Sunday which could be another volatile time on the Euro which would also have a knock-on effect on the pound and global sentiments on exchange rates. If you are planning to buy a foreign currency with the pound current levels are much improved following hints at an interest rate rise. However many recent high expectations on interest rates rising in the UK have quickly faded, there are many arguments to say this will be the case again.
If you have a transfer to make buying or selling the pound the next 48 hours and early part of next week could be very busy. With potentially big swings on the currency outside of usual business and trading hours making some plans in advance for any large swings might be sensible. If you have a transfer to make now or in the coming months these events could well determine the price you will be getting so making plans sooner could be the best option.
If you would like to learn more regarding the relevant strategy to take in approaching any international transfer of £10,000 – £5m +, then please speak to me Jonathan Watson by emailing [email protected]. Ideally please leave a phone number or why not call me on 01494 787 478 and ask to speak to Jonathan Watson.
Thank you for reading and I look forward to hearing from you.