A Strong Week for Sterling

Last week proved a winner for the pound as it made decent gains against its main pairings. We saw over 2 percent gains against the US dollar and the Euro, as support for Brexit “Plan B” seemed to snowball as the week rolled on, with the DUP offering their unwavering support to the Prime Minister for it, ahead of the Parliamentary vote on Tuesday.

For those looking to buy currency, we have seen some of the best rates in nearly two years, with many opting to lock in on a forward contract, just in case we see these levels deplete again come voting day. It seems markets see the fact we have seen one vote rejected and now the PM having to go back with a “Plan B” as a higher chance of a softer Brexit. May has been seeking support from the EU to try and appease amendments to the deal before it goes to the vote on Tuesday, which if it gets through, could see fresh highs reached according to some analysts expectations. Of course, if the vote doesn’t get through again, could sterling fall off a cliff, given the recent gains and the negative sentiment surrounding a “No Deal Brexit” we have seen reported in recent weeks?

If you would rather not take the risk, speak to one of the team today to book your forward contract, locking in the rate today for future delivery and settlement, or talk to us about a Limit and Stop Loss order, which allows you to aim for a rate not quite achievable yet, whilst protecting yourself should the rates start to correct back down.

As the month comes to a close, most eyes will be focused on the Brexit vote Tuesday, and subsequent sentiment towards the Pound. In addition to that, the UK may be quiet for data but we have Central Bank statements from the US and Australia, plus key readings from the EU and US to round off the month, ahead of the non-farm payrolls on Friday to kick off February.

Eco Stats to watch out for:

• Monday – ECB President Mario Draghi speech
• Tuesday – UK Parliamentary vote on Brexit Plan B, time TBC
• Wednesday – Australian inflation figures, German GfK consumer confidence survey , UK mortgage approvals, EU business climate survey, German inflation, US Federal Reserve interest rate and policy statement release.
• Thursday – Australian interest rate statement, German retail sales, German unemployment, EU GDP and unemployment, US employment change and Canadian GDP.
• Friday 1st February – US Non-farm payrolls

Another busy week for the pound no doubt, so if you have a currency requirement coming up, speak to one of the team today to discuss your options.