As we head ever closer to the Brexit date of 31st December it is likely once again that Sterling exchange rates may be dominated by Brexit trade deal discussions and progress (if any) that is made with them.
On Friday, news broke that the Prime Ministers chief advisor Dominic Cummings, no stranger to the headlines had departed from number 10 with immediate effect, this news coupled with the fact that PM Boris Johnson is now self-isolating again due to coming in contact with someone carrying COVID-19 has bought a little political uncertainty to the UK, but on the other hand many think that with the departure of Mr Cummings (who incidentally was the chief architect of Boris’s leave campaign) we may see a slightly softer approach which was quickly watered down by ministers.
With an EU summit on Thursday of this week many feel that this could be crunch point for the trade deal, a new deadline has been suggested of 23rd November before they would need to have something agreed in principle, and with UK’s Chief negotiator David Frost having arrived in Brussels for crunch talks this week I would not be surprised either if this week is the week where we finally get the long awaited breakthrough.
What Will Happen if a Brexit Trade Deal Agreement is Announced?
Should we hear news later this week, or in the coming weeks should the can be kicked down the road again that the two sides have come to an agreement and that the Brexit trade deal between the UK and the EU has moved onto the next stage, then it would be likely that the pound may find strength against all major currencies.
The strength may not be down to the fact that the two sides have agreed a deal but more down to the fact that the likelihood of a no deal Brexit has been severely decreased, it is thought that a no deal Brexit could be very bad news for the UK economy initially, and had been one of the reasons that the pound has struggled over the last few years.
We must not forget that even if steps are made to shake hands and to move forward with a deal this week there are still many hurdles to overcome for it to be agreed officially, so this won’t be over just yet, but it would be a big step in the right direction to lift a huge amount of uncertainty and some dubious looking grey clouds from over the head of the pound.
Keep a close eye on developments over the course of this trading week as this is one of those situations where an announcement could come at any time, and the markets are so focused on it that should there even be a hint towards progression from members of either side that are directly involved you may see quite a bit of volatility for Sterling exchange rates off the back of it.
Currency Exchange – Need Assistance?
If you have a currency exchange coming up and you would like assistance with navigating the current market volatility, you can get in touch using the below form and I’ll be happy to respond personally to discuss your requirements.