Brexit deadline looms closer
27 September, 2019
This week markets have continued to provide some good buying opportunities for those with sterling in hand looking to buy foreign currency. On Tuesday morning courts ruled and the Prime minister had been unanimously agreed that his suspension of Parliament was unlawful, which gave Sterling a little leverage although only short-lived.
With the Brexit countdown now only a mere few weeks away and Parliament is back up and running in the house of commons. Recently there have been many an angry exchange between MP’s over the suspension which has been dominating headlines. The constant back and forth continues and with Boris Johnson not making matters any easier for himself with fresh comments and upsetting many in the House by saying he will not seek an extension even if he does not secure a new deal or if MP’s do not agree to a no-deal exit, the future remains uncertain. But what is likely to happen? And how will this affect the exchange rate?
- A no-deal Brexit remains to be the worst-case scenario which the PM is saying will happen on the 31st of October if the EU does not agree to remove the backstop and offer alternative arrangements. In this event, forecasts are predicting a sharp decline in rates.
- MP’s could push the PM to seek an extension from the EU to move the deadline further to the 31st January 2020 in order to gain more time to renegotiate a deal. The outcome of which could also be Sterling negative for some time, but perhaps not as damaging as a no-deal exit. (but critically the PM has already said he will not obey the law and request an extension)
- Could we have an early election? Again promotes further uncertainty and again overall not Pound positive.
Yesterday’s economic releases were focused on the US who posted a handful of stats, the one to note being GDP which remained at 2%, Personal and core consumption expenditures were also up 0.1% and 0.2% respectively. Today again the focus looks to be on the US but nothing too major expected for market movements.
There is a long way to go before we are likely to see any major recovery, and although things may seem a bit bleak just now, it’s important to realise there are ways in which you can stay in control of your transfers. Current rates are sitting just shy of the best levels against the Euro and Dollar since June/July of this year, so take advantage of the tools we offer to target and pre-fix exchange rates in order to help you manage your costs.
Get in touch with the team at Currency Index to discuss how we can help.
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