The pound has rocketed across all of the major currencies after it was reported that the British government is prepared to pay a larger divorce settlement which has attracted considerable media attention. GBP EUR has pushed higher today reaching a high of 1.1341 this afternoon whilst GBP USD reached a high of 1.3448 in afternoon trade.
Although no figure has officially been confirmed there are reports of a Brexit divorce settlement which could amount to up to €50 billion which drove the pound higher on the back of the news.
Clients holding sterling looking to buy Euros or dollars would be wise to pay attention to the political landscape both in Britain and the European Union ahead of the crucial EU summit mid-December. Although rates have surged in the last 24 hours a statement from the European Parliament this afternoon entitled “Brexit: progress but not enough” sends a clear signal to the markets that the outlook in this Brexit negotiation is still not rosy. Strong comments from EU negotiator Michel Barnier earlier today also highlight that tensions are building between the two sides. Any developments from either side are likely to continue to be the main driving force for sterling exchange rates.
UK data is light tomorrow although consumer confidence released overnight could help highlight the feeling on the high street ahead of Christmas. Clients looking to buy or sell Euros are likely to see volatility for Euro exchange rates on the back of Consumer price Index inflation numbers and unemployment data released on Thursday.
Buying Australian Dollars?
Clients who find themselves holding sterling and looking to buy Australian dollars are seeing excellent buy opportunities with rates having broken well over 1.77 for the GBP AUD pair. The combination of the expectation that the Reserve Bank of Australia won’t raise interest rates until late 2018 coupled with the likely interest rate hikes planned in the US are both helping to see the Aussie dollar weaken. There may be some more room in this rally although any deterioration in the Brexit negotiations could see some of that good work undone.
To discuss how these key issues of the moment are having a direct impact on the rates of exchange available then please fell free to get in touch with me at email@example.com