The pound is struggling to push beyond the recent highs against the Euro with levels for GBP EUR sitting just below 1.13.
The pound is being hampered by constant political uncertainty with new stories coming out almost by the day all adding a little bit of risk for the pound. The latest resignation of a senior cabinet minister could see a cabinet reshuffle in the coming weeks.
The resignation yesterday from Priti Patel and Sir Michael Fallon in the week before all weigh heavy on a government that recently lost its majority in the House of Commons. Politics continues to be a major driving force for sterling exchange rates and this is unlikely to change anytime soon. With the position of International Development Secretary now filled by Penny Mordaunt expect the markets to guess who will be next to go.
UK economic data is heavy on Friday with manufacturing and industrial production figures as well as trade balance data. The GDP estimate from the National Institute for Economic and Social Research could also create some major volatility for the pound vs the Euro. The strength of the British economy is a big driver for the price of sterling and any projection of a fall could see the pound come under added pressure. The NIESR estimate is an excellent pre cursor to the official economic data and the markets can move quickly on the bag of a strong or weak number.
The Brexit negotiations have resumed today and any comments from Brexit secretary David Davis or his counterpart Michel Barnier are likely to cause volatility for sterling Euro rates. The stalemate over the amount Britain is prepared to pay is preventing the pound from making gains although it may only be a matter of time before sufficient progress is made.
Clients looking to buy or sell Euros would be wise to make contact and look at the options available. There are reports that pressure is mounting on Britain to move forward within the next two weeks. As such at the end of the period there could be some considerable volatility for GBP EUR. Please feel free to make contact with me at [email protected] to take a look at your requirement and how we can help achieve the best rates of exchange as they become available.