Brexit Talks – Pound Up

The ‘Brexit Bill’ passed through parliament in the early hours of Tuesday morning following the vote. The bill signifies the formal end of Britain’s membership with the European Union and puts Theresa May’s plans to Brexit back on track. That being said, the prime minister is still under pressure having lost her majority in June’s election and various parties already seeking amendments to the bill which could pose delays further down the line. Has this step forward also helped move the Pound up against its majors?

Pound up over 3% in just 10 days

Yesterday morning we saw the Pound rally against the Euro and US Dollar gaining around half a cent in a matter of minutes following a raft of positive eco stats released at 9:30am. UK Inflation surprised the markets by posting 2.9% better than forecasted 2.8% for the month of August which gave the pound a much needed boost.

As the trading day continued we saw the rates increase nearing a 6 week high and over 3% up in just 10 days against the Euro and it also rose to a one year high against the Dollar. It seems that investor speculation is what has kept the rates up ahead of the Bank of England’s interest rate decision and monetary policy statement due on Thursday where it is expected that a majority of committee members will vote for no change to the current rates, however comments made during the statement by Mark Carney will be one to watch as any indications to change the current policy could cause some movement in the rates.

Today we have more UK data due in the form of ILO Unemployment Rate, Claimant Count Change and Average Earnings all due at 09:30am followed by European Industrial production and Employment Change at 10:00am. In the afternoon the focus turns to the US will the release of Augusts Producer Price Index at 13:30pm. We could see rates continue at the current levels ahead of the Bank of England’s Interest rate decision tomorrow which will be closely watched by the market.

Although the Pound has experienced a small spike, it should be warned that the Euro continues to be the strongest of the major currencies. So. if you have a currency requirement it may be a good idea to make the most of these recently improved rates as they may only be around for a short period before the markets correct back down to the levels we have seen just a few weeks ago. If you have sterling in hand and need to place an order for currency but may not have the full amount of funds available you can lock in your requirement at today’s rates using our forward contracts– making the most of the current Pound up improvement with just a 10% deposit. Securing your full requirement and settle the balance at a later date set by you.

Call us today to speak to one of our friendly currency brokers for some more information.