Focus on Brexit negotiations for the Pound
30 August, 2017
With a fairly muted start to the week in the UK with the bank holiday on Monday and a low key day on data yesterday, the attention switched to Brussels. With the focus back on Brexit negotiations for the Pound with the third round getting underway earlier this week, everyone is keen to find out what progress, if any, can be made during these talks. With Labour calling for the UK to stay in the single market during the transition period, will we see more political uncertainty in the House of Commons and more pressure on Mrs. May to deliver, this could further send the Pound to new lows (a term that will be used more often than not should the current market conditions continue).
The initial reports suggesting that both parties, are unhappy with the progress being made, with the key focus on EU citizens rights in the UK and vice versa. The sooner this is resolved the better for the exchange rates. Another key point being discussed during the third round of negotiations is the divorce bill settlement, with the UK previously saying that the amount demanded was ‘unacceptable’. Talks of a suitable agreement regarding these issues being found this week, have been “played down” With just under two years remaining till the Brexit deadline – talks will have to progress more swiftly for a deal to be agreed. http://www.bbc.co.uk/news/uk-politics-41070227
If you have Euros in hand however and are looking to sell them back, this is the perfect opportunity as we have the best trading levels for 8 years. It wasn’t all doom and gloom however, with the GBPUSD rate opening the day a cent higher than close on Friday providing some much needed reprieve for USD buyers. However these gains were short lived as the rate dropped half a cent by close of business yesterday.
With a busy day in the markets today – mainly from the Eurozone and US, we can see the rate plummet further should both these major pairings post more positive data. With recent history favouring these results, it could be a good idea to get your currency early doors should you have a immediate requirement. Speak to your account manager today.
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