Brexit dominates, pound weakening?

3 July, 2018

Paul Newfield

Manufacturing data took centre stage yesterday with key data releases from the UK, the US and a few of the major EU nations. Figures from Spain, France and the EU as a whole posted negatively, whilst those from the US, UK, Germany and Italy were as expected or better. Elsewhere, EU unemployment also remains unchanged at 8.4%.

The pound, whilst relatively stable for the last few days, remains in a vulnerable position and could tumble further and soon, as Brexit yet again, has become a focal point of discussion, with the British chamber of commerce publishing a list twenty-three “real world” questions largely concerning VAT, tariffs, regulations and tariffs, to be put to Theresa May. Following contact with lots of UK businesses it is still clear investment is low down on the list of priorities currently as uncertainty is reaching ever high levels. Later this week the PM meets with an enlarged number of ministers, as many as twenty, rather than the usual dozen or so who are split on whether a soft or hard Brexit is in the best interest of the nation, possibly to negate the influence of hard-Brexiteers such as Boris Johnson – it is becoming apparent to many in government that in order to grow the economy and invest more money in the public sector, a softer Brexit is necessary.

Today is a quiet one on the data-front with only PMI construction from the UK and 09:30 and Brexit news likely to be the main market mover and with little other UK data of note, if you need to convert pounds into any other currency it will be wise to keep an eye on the days’ proceedings to make sure you aren’t caught out with any further drop off in the rate – if you have not already done so you may lock in today’s rate for up to two years ahead to neutralize any threat of a rate drop off and protect your cost from increasing exponentially. Stay in touch and don’t let the weakening pound deter you from buying that dream property abroad.