Pound to euro exchange rates have been on somewhat of a rollercoaster ride over the trading week so far, with investors and speculators trying to second guess what may happen next in the Brexit soap opera we currently appear to be witnessing.
The focus really does seem to be on whether or not the U.K will allow the talks to go beyond Boris Johnson’s original deadline of 15th October (tomorrow) or if they will start the ball rolling with no deal Brexit planning.
For regular readers you will be fully aware that a no deal Brexit has pretty much shackled Sterling exchange rates for a few years now, it is deemed as a potentially huge negative for the U.K economy. With currency markets moving on speculation as well as fact you can then see the pound get weaker even on there being a higher potential of a no deal Brexit.
Yesterday the chances heightened over the course of the afternoon as news on the wires suggested that the EU were still not happy with the current round of talks and that they would need more to be done in order to reach a deal, with that Sterling exchange rates lost a fairly significant amount of ground against all major currencies, dropping close to 1.5% against the Dollar and over 0.8% against euro.
The weakness continued in early trading this morning only for news at around 10am from Bloomberg suggesting that the U.K may be willing to extend the timeframe of negotiations due to a deal getting closer.
This whole rollercoaster of a trading week so far just goes to show how fragile the situation is and how easily we could see Sterling exchange rates either gain significant ground in a short period of time (should a deal be reached) or for Sterling to fall very quickly should the process of no deal look like the route that the U.K are going to take.
Without being able to access just how the discussions are going and having to rely on media reports does make this an extremely difficult situation to predict, it does feel like neither side wants to, or can afford to walk away without a deal, especially in the middle of a pandemic, but to be clear it also wouldn’t be a huge surprise if they just cannot meet in the middle and talks break down.
The next few hours, days and indeed weeks will be crucial for how Sterling exchange rates perform, so if you are in the process of buying a large sum of foreign currency or if you have sold an overseas property and you need to bring the money back then it may be prudent to ensure you are watching the markets at all times as anything could happen.
We at Pound Sterling Forecast can assist you with your exchanges, and keep you up to date with the latest market movements so you can be comfortable that if a great opportunity to push the button comes up we will be straight on the phone to help you take advantage of it.
If this would be of interest to you then please feel free to fill in the form below and we will contact you personally to discuss your requirements, and to explain the various options we have available to you.