Last week it emerged that UK Prime Minister, Theresa May is planning a softer Brexit after details of the ‘White Paper’ were released.
The White Paper contained the plans and the offer of the UK to the EU regarding the Brexit plan. Previously news of a softer Brexit had given the Pound a boost, as the markets viewed the transition from being an EU member to a non-member being easier although the news caused a different reaction this time.
Pressure has been mounting on May as a number of hardline Brexiteers have made their views clear that her approach is too soft, and these views were solidified last week when Brexit secretary, David Davis resigned. The impact to the Pound’s value was evident although not overly dramatic as markets were aware of his doubts, and the same can be said about Boris Johnson who also resigned.
The Pound is now being influenced by this issue, and I expect it to continue to be driven by both sentiment as well as any further unforeseen changes to the Brexit plans and May’s cabinet.
There has even been talk of Theresa May’s position coming under pressure with some betting companies making Jeremy Corbyn favourite to fill her position.
Aside from Brexit I think those with a GBP/EUR currency requirement this week should pay attention to Wednesday’s economic data releases. There will be both Retail and Inflation data released and this could influence rates as it could determine whether the Bank of England (BoE) will opt to hike interest rates or not in August. I expect to see the GBP/EUR exchange rate climb in the event of impressive releases this Wednesday, and feel free to get in touch if you wish to discuss the expectations and to plan around them should you wish.
Another potential market mover is the ‘special relationship’ between the US and the UK. US President, Donald Trump was in the UK last week and his comments regarding the Brexit plan and how this impacts UK-EU relationships moved the markets. This is another area that could influence GBP/EUR and it’s ongoing. For more information if you have an upcoming transfer, feel free to get in touch here.