One year on and no major changes in rates

Now a year on from the referendum vote last year, and exchange rates are still widely being controlled by market sentiment. We have seen GBP/EUR rates drop from 1.30 to 1.10, and GBP/USD rates go from 1.45 – 1.20 and everything in between over this past year. And unfortunately, it would seem that these current levels are set to stay for some time still.

With the Pound weakened again by an election that many felt was unnecessary, and had backfired on the Prime Minister, causing a rift in politics and consequently affecting the exchange rates. As our regular readers are now aware, uncertainty does not bode well for investors and until we have a clearer view on the Government’s position and if the conservatives successfully form a new government with the DUP party, this is still very up in the air. Brexit negotiations have also officially begun, and with a change of attitude towards what was due to be a ‘hard Brexit’, it seems Theresa is now approaching the topic with a much softer tone.

For those with Sterling in hand who have a currency requirement due in the coming months, it is important to realise that the results from these negotiations are unlikely to have a drastic or immediate effect on the exchange rates. Expectations of seeing rates return to the levels we saw back in February and April are at this point improbable. Especially as now even the Bank of England Committee members are divided over whether or not interest rates should be kept on hold amid Brexit uncertainty, with the Banks governor himself saying quite frankly that ‘now is not the time’ for and interest rise has again put some pressure on the Pound.

Today is another quiet one in the way of economic data releases, the morning at 09:00 the EuroZone release their services & manufacturing growth figures and later after lunch Canadian consumer inflation is released at 13:30.

It may be worth seriously thinking about the various options we provide to help you secure your requirement, and if you are concerned, then please do feel free to get in touch with one or our friendly brokers to discuss how we can help on 01923 725 725.