Last week we have seen some consistent gains for Sterling

16 September, 2019

Luke Dyson

Looking back over the last week we have seen some consistent gains for sterling with a 14 week high for GBP/EUR and an 8 week high for GBP/USD. With GBP/EUR hitting its largest intraday gain Friday since the beginning of August. This sudden rally is from speculation that changes may be made to soften the fixed plan for the Northern Irish backstop in a last-minute pursuit of an exit agreement by the 31st of October deadline. With Boris now contemplating a change to the initial agreement in hope of securing a deal he has planned to travel to Luxembourg to meet European Commission chief Jean-Claude Juncker and so now has thrown fuel onto the speculative fire.

Although the past week for sterling was overall positive, there still is a lot of volatility and potential for downside movement the closer we get to the up and coming deadline, with most major moves priced in and waiting for negative Brexit announcements to set them off. Please take advantage of these newfound highs as they are often short-lived with the potential for multiple cent moves within a couple of hours. For example Thursday 12th Sep if you were to of bought £100,000 worth of Euros at 13:00 GMT then to of bought at 15:00 GMT on the same day you would have been over €1,000 worse off.

For the weeks ahead the liberal democrats have stated they will cancel Brexit if they come into power, Although this would be positive for sterling they would need the party to win the election as a majority government. With that been said it still keeps the door open to sterling negative news if this does not come through and so more room for downside movement off these newfound highs.

Please don’t hesitate to contact your currency consultant if you have a pending currency requirement, we will be able to work with you and provide you with the best strategy for your transfer.

Key Currency Calendar

17th Sep
EUR – German ZEW Survey

18th Sep
EUR -Euro Zone CPI
USD – FOMC Interest rate decision

19th Sep
GBP- Retail sales
GBP-BOE RATE decision

20th Sep
Eur- German PPI
GBP- Public sector borrowing