After a long-awaited ruling from the Supreme Court, global currency markets now know Parliament’s role in the Brexit, and we have seen this confidence imbued into the value of the Pound, with GBP/EUR, GBP/USD and GBP/AUD all seeing a boost since yesterday morning.
However, for such a delayed result, the movements, though an improvement for Euro and Dollar buyers alike, was rather underwhelming… Initially exchange rates actually fell following this announcement with investors spooked at the lack of euphoria surrounding the Pound. But logic settled in and the Pound finished the day a few steps higher at close of play in the UK.
Overnight, further improvements were recorded with North American markets continuing to trade on the news.
So what next?
We have the framework established for the continued Brexit discussions, and markets have now priced in a stronger Pound because they believe that Parliament will delay Brexit proceedings, and reign in any extreme measures which may be on the table. Whatever your own views on the Brexit, it is best to remember that currency markets have shown time and time again their own nervousness concerning the Brexit, with frequent heavy drops in Sterling value since last June surrounding the issue.
Now the deciding factor will be how well will Theresa May work with her Parliament, and will she continue to operate with some degree of independence? After a heated debate in the House of Commons yesterday following the Supreme Court Decision, she is certainly in for a fight.
Therefore, if we take her previous actions as a model for her response, we can expect her to vigorously defend her aims to take the UK out of the single market, which is one of the main points of contention with Parliament.
Hardline language like this used in a Sky News interview a few Sundays ago cause the Pound to plummet against the Euro by 1.5%, against the Dollar by 2.8% and against the Australian Dollar by 2.4%. In this war of words risk is everywhere in a touchy market, with interviews and comments hitting the currency markets without much warning.
As such if you are planning to purchase AUD, USD, EUR, or even the Canadian Dollar since I have had increasing requests for help in this area recently, there are strong arguments to secure the recent gains made against your chosen currency pairing, as this risk of waiting quite clearly at this point outweighs the potential for further gains. The minor improvements in GBP/EUR, GBP/USD, and GBP/AUD are proof that Sterling is struggling to make much of an inroad against its currency counterparts.
It goes without saying that foreign currency sellers looking to buy Sterling are not facing the same rush, and opportunities are expected to present themselves in the short and medium term as we edge closer to Article 50. Though USD sellers will struggle for improvements in this current climate in the US.
If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well worth your time getting in contact with me on email@example.com in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
You can also speak to me directly on the phone by calling 01494 787 478 and asking reception to speak with Joshua.