Brexit events coming up

5 September, 2018

Nakhil Mahra

Yesterday was the first day the UK parliament returned from its summer break with so much left to be discussed surrounding Brexit, we can expect some announcements in the coming weeks. Yesterday was one of those announcements, with Carney looking to stay put and ‘do what he can’ to ensure we have a smooth Brexit. With him particularly being vocal about a no deal Brexit being disastrous for the UK, Theresa May will sure be glad to have him on board for the time being. Carney’s announcement provided a brief fight back for the Pound as it tried to break key resistance levels before falling back at close of business. The day started off on a negative note with UK construction PMI falling by 2% on Augusts figure falling to 52.9%.

We are now entering the tail end of Brexit discussion and the next 6-8 weeks expected to be extremely volatile. With a deal being agreed far from certain, even after Barnier’s comments last week, there are still several key issues yet to be solved. A few key dates to keep an eye on;

  • September 20; informal EU summit
  • September 30 – October 03 Conservative party conference
  • 18 October EU summit at which the UK and EU are scheduled to finalise the agreement, and a potential extra summit in November in the event that the withdrawal agreement is not finalised by the October summit

Elsewhere in the world we had data from the US, Ism Manufacturing coming in above expectations at 61.3, continuing the recent positions of strength. All in all Sterling continues to remain under pressure from its pairings and a break out from these trading levels looks unlikely in the coming days. The threat of parity by the new year still very much a likelihood, particularly if a no deal Brexit scenario shows its ugly head. Have you got enough flexibility in your budget to cover for these losses, are you still able to afford your overseas property should the Pounds value drop by 10%? If the answer is no then why not speak to your account manager here at Currency Index to discuss your options an how to mimimise your risk with your foreign currency purchase.

South Africa enters recession

South Africa entered its first recession in a decade yesterday, following weaker than expected results, the current market turmoil and pressure on president Cyril Ramaphosa. Poor farming output and weak consumer spending has seen South Africa being dragged into the turmoil we have seen Turkey and Argentina suffer from in recent months and saw the Rand lose 1.5% on both the USD and GBP. If you have a requirement to send money to South Africa coming up then why not take advantage of this peaks by locking in the rate with our forward buying options.