Brexit sends Pound lower
23 July, 2018
Brexit sends Pound lower
Last week saw sterling fall to its lowest rate against the Euro since September, after the recent raft of Ministerial resignations, reshuffles and renegotiations took its toll on the UK government’s Brexit credibility.
While rates have improved slightly over the weekend, new Brexit Secretary Dominic Raab has his work cut out to negotiate terms that are acceptable to the EU, MPs, Conservative backbenchers, and the public. Time is running out for an October agreement and the government is stepping up preparations for a potential ‘no deal’ outcome, which analysts think would very likely send the Pound into free-fall. New Foreign Secretary, Jeremy Hunt, said this morning that without a “change in approach from the EU negotiators”, there is now a “very real risk of a Brexit no deal by accident”, and Theresa May met her senior ministers in Gateshead this morning for the last scheduled cabinet meeting until September.
The Pound also reached its lowest rate against the US Dollar since September, as UK economic data last week failed to bring any positive news, including very poor retail sales and an insignificant change in inflation.
If you have currency transactions due in the coming months, we recommend discussing the potential impact of Brexit negotiations with your Currency Index account manager at the first opportunity. We can alert you to any movement in rates, whether beneficial or adverse, and offer you options to either fix a rate in advance, or buy currency automatically at trigger rates set by you. Don’t leave your rate to chance, or your budget could spiral out of control quicker than Boris Johnson.
News releases this week
We have a quieter calendar this week in terms of data likely to move exchange rates, and with Parliament now in recess until September the main factor in market fluctuation is likely to be on any Brexit negotiation developments. For those of you buying or selling Euros, the ECB press conference on Thursday after their interest rate announcement is one to watch, while there is no major UK data apart from house prices and mortgage approvals. GDP in the States is announced on Friday to finish off the week’s scheduled economic statistics.
1500 Eurozone consumer confidence
1800 Speech – MPC member Broadbent
0830 German services & manufacturing growth
0900 Eurozone services & manufacturing growth
1445 US services & manufacturing growth
2345 New Zealand trade balance
0230 Australian inflation
0930 UK mortgage approvals
1500 US home sales
1245 Eurozone interest rate decision
0700 UK house prices (Nationwide)
1330 US GDP
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