2020 starts and Brexit looms

3 January, 2020

Matthew Boyle

It might be said that we have seen a good start for the Pound in 2020, following Boris Johnson’s decisive win in the UK general election in early December. Following his win, the Pound surged to 3 year + highs, however as the month progressed we did see it slip back down, and just before Christmas it had in fact lost all of the election gains.

Whilst the Pound did gain around 5% over the course of 2019, this is likely largely due to the fact it started the year in such a weak position, largely due to the threat of a no-deal Brexit, and this is perhaps why we saw it slump slightly after Johnsons win, as he legislated for no further extensions to Brexit…essentially putting the possibility of a no-deal back on the table of no agreement could be reached.

Whilst UK parliament is due to resume next Tuesday on the 7th of January, it would seem now that Brexit has more clarity the market will start to rely once again on Economic data releases to denote movements in rate. That said, we still have a long way to go in the way of negotiation over the actual deal, and any political hurdles could send the Pound down once again.

Whilst currently the market is relatively quiet, with much of the country not returned fully to work as yet, no doubt we are in for a busy month, particularly as economic data releases will begin to come hard and fast next week and the return of parliament will see Brexit news once again in the Mainstream media.

If you have any upcoming transfers to make, stay in close contact with your account manager who can keep you up to date and advised of any releases which may affect your currency transfer. As economic data will start to become much more important again, expect to see daily swings in the rate, which you Currency Broker can keep you well advised of.