The pound is set for a hugely volatile week as the House of Commons Brexit withdrawal vote approaches next Tuesday. The pressure is now very much on Prime Minister Theresa May who will be meeting Brexit ministers today to discuss the final arrangements for a backstop plan. This proposal has been very controversial within cabinet with a public clash between Brexit secretary David Davis and Theresa May. If no agreement can be reached today then this could prove problematic for sterling exchange rates with the pound likely to come under further pressure.This of course is all ahead of the voter next week which will see 15 amendments from the House of Lords voted on. If the government is defeated on a number of these votes then this could freeze the Brexit process and delay things which in my view would be negative for the pound due to more uncertainty both politically and economically.
Clients looking to buy or sell Euros are likely to see a very volatile period on the back of any developments and should consider their options at this stage. Rates for buying Euros are very close to the recent 1 year highs seen a couple of months ago.
European Central Bank members Praet, Hansson and Knot will be meeting this week and are likely to offer forward guidance. Any clues here as to when the ECB will conclude its asset purchasing scheme are likely to see the Euro react. If the Quantitative Easing programme is stopped in its entirety then the Euro is likely to strengthen on renewed confidence. However any suggestion that the tapering of the scheme could be extended is likely to result in Euro weakness.
EU GDP data is released this morning and could be one to watch. Any pick up in the numbers today could also prove Euro positive.
Fore assistance in making transfers and how to maximise on the rates of exchange when they happen then please get in touch with me at [email protected]