Currency Forecasts

MP’s to vote on Brexit: What could happen to Pound exchange rates?

Once again we find ourselves in limbo as far as exchange rates are concerned until we have further clarity regarding Brexit. We are expecting MP’s to vote for a third time this week on Prime Minister Theresa May’s Brexit deal. But what are the potential implications?

Is the PM getting the support she needs?

Last week MP’s rejected her latest proposal for the second time by 149 votes but backed plans to rule out leaving the EU without a deal. They also voted in favour of an extension to the process, either until the 30th Jun if the deal can be passed by the 20th, or a longer term extension, with some of the key personnel from the EU suggesting the delay could be as long as two years.

It appears Theresa May has started to gain some support with a number of MP’s reluctantly backing her plan. Consensus is they feel her deal is better than a delay or another referendum. She still has someway to go with the number of Tories backing her plan falling short of the 75 she needs.

If her momentum continues this week and she gets her deal through then the pound could and should strengthen towards 1.20 GBP/EUR and 1.35 GBP/USD. Of course the risk is should she fail for the third time and once again the pound will be stuck in limbo and the uncertainty will most likely cause the pound to fall.

Do you need to buy Euros, Dollars, or any currency with Pounds?

If you are worried about exchange rates, then get in touch with us today to discuss your options. You can freeze the current rate for up to 12 months by using a ‘Forward Contract’. Or, if you think exchange rates will rise further, then you could consider a ‘Stop Loss’. This is where you instruct us to buy your currency if the rate drops below a pre-agreed level e.g. €1.15. In this way you can take advantage of further gains in the rate, while having protection against a sharp drop should things change. You can couple this with a ‘Limit Order’ to purchase currency if rates reach a certain level e.g. €1.20.

We also offer free rate alerts by text, and a 24 hour online trading system so you can see the rates we offer and purchase online when necessary.

(Please note we do not offer cash or holiday money; our service is for bank to bank currency transfers for requirements such as buying or selling property abroad, or international transfers for business. Our rates are up to 5% better than banks or other brokers may offer, and we are fully FCA Authorised).

Click here to find out more about how we can help.

Third time lucky for PM Theresa May. GBP/EUR forecast

Prime Minister Theresa May will try and persuade MP’s for a third a time to back her Brexit deal. A vote is expected on the 20th March after MP’s voted yesterday to ask the EU to delay Brexit beyond the current deadline date of the 29th March.

We now find ourselves in a situation, that if a deal cannot be reached, a lengthy extension of potentially two years could be seen. Not something anyone would relish……

There is a real impatience in Europe and European Council President Donald Tusk has said EU leaders could be open to lengthy extension “if the UK finds it necessary to rethink its Brexit strategy”

GBP/EUR forecast

We find ourselves heading into what could be an extremely volatile week for the pound. If Theresa May can get a deal through, which is still a possibility, then I would expect some strong sterling gains for the pound – a move towards 1.20 could be seen. If she cant, and we face the potential of another two years of uncertainty, then the pound could fall, and heavily in my view. The lengthy extension is a scenario that no one wants and I for one hope she can convince MP’s that her deal is the best option.

If she can get the deal passed before the 29th then Mrs May could ask the EU to delay Brexit until the 30th June. Alternatively there could be a much longer delay and require the UK to take part in elections for the European parliament and a potential UK general election. This uncertainty would, in my view, cause the pound to fall quite significantly from its current levels.

Worried about Brexit affecting exchange rates?

If you are worries about how Brexit talks are affecting exchange rates, then contact us today for a free consultation with one of our expert currency brokers. We can discuss your requirements, explain how our service works, and provide you a quote to see how much you could save by using our currency services.

Click here to make a free enquiry

Pound/Euro hits €1.18 after ‘No Deal’ rejected

As you can see from the graph below, the Pound has surged higher after this evenings Parliamentary votes against leaving the EU without a deal: Pound/Euro hits €1.18:

GBP/EUR 13th March 2019

Sterling has seen its biggest one day rise of the year so far. GBP/EUR hit €1.18 while GBP/USD reached $1.34, the highest we’ve seen the Pound for some time.

Why has the Pound gone up?

We had expected a vote to reject No Deal on the 29th March, however an amendment by Labour’s Yvette Cooper rejecting a no-deal Brexit “under any circumstances” was won, by a very small margin of just 4 votes, ahead of the governments motion that also won by 374 to 164 . This shows that there is a majority to rule out leaving without a deal.

This means a delay is now almost inevitable and will be voted on tomorrow evening. This opens the door to many options. Some think that a softer Brexit could be on the cards. Others, that a second referendum may happen. Most likely, May’s deal could now be passed if there is a small delay in order to get it agreed. Whichever way you look at it, No Deal is now unlikely, and the Pound has risen as a result. There remains much uncertainty, and given the Pound has risen so much, the rally could soon run out of steam.

Do you need to buy Euros, Dollars, or any currency with Pounds?

If you are worried about exchange rates, then get in touch with us today to discuss your options. You can freeze the current rate for up to 12 months by using a ‘Forward Contract’. Or, if you think exchange rates will rise further, then you could consider a ‘Stop Loss’. This is where you instruct us to buy your currency if the rate drops below a pre-agreed level e.g. €1.15. In this way you can take advantage of further gains in the rate, while having protection against a sharp drop should things change. You can couple this with a ‘Limit Order’ to purchase currency if rates reach a certain level e.g. €1.20.

We also offer free rate alerts by text, and a 24 hour online trading system so you can see the rates we offer and purchase online when necessary.

(Please note we do not offer cash or holiday money; our service is for bank to bank currency transfers for requirements such as buying or selling property abroad, or international transfers for business. Our rates are up to 5% better than banks or other brokers may offer, and we are fully FCA Authorised).

Click here to find out more about how we can help.

Pound remains supported amid Brexit uncertainty

As I’m sure our readers will know, Parliament voted against Theresa May’s Brexit deal. This was not a surprise as the day went on yesterday, it became clear that the DUP and ERG would not vote through the deal.

Tuesday morning starting with optimism that a deal could be agreed. Theresa May came back with the amendments many thought would be enough to vote through the deal. Indeed many ardent Brexit supporters had indicated they would support the deal, and this optimism caused the Pound to rise. At one point GBP/EUR exchange rates were approaching €1.18 which is the highest we have seen in 2 years. However the gains were not to last.

May’s deal torpedoed by Attorney General, Sterling falls

Things started to unravel when it became clear that the Attorney General Geoffrey Cox would not change his legal advice that the UK could be trapped in the ‘Backstop’. It’s not surprising given that he has been a Barrister for 36 years, and a senior politician for less than a year. He has stated that his reputation as a barrister is more important to him that his reputation as a politician, and legally speaking he had to conclude that his legal opinion remained unchanged. As such, as it became clear the vote would not pass, the Pound fell accordingly. GBP/EUR dropped to €1.1550 before recovering slightly.

Why hasn’t the Pound fallen further?

Pound remains supported – The assumption was that the Pound would fall, however as this had been priced in throughout the day, it was largely unchanged when the vote was passed. Today, the Pound has recovered to €1.1650 vs the Euro and $1.32 vs the US Dollar. The reason the Pound hasn’t fallen further, is that many still expect some deal to be agreed. That’s why the Pound remains supported

What next for Brexit and the Pound?

Tonight, MP’s will almost certainly vote against the UK leaving the EU without a deal. On Thursday, a vote will be held on whether to extend Article 50. It’s here that it gets interesting. It could well be that with No Deal ruled out and Brexit supporters feeling that an extension could risk the UK not leaving at all, a 3rd vote could be held as soon as Friday. Perhaps they will conclude that May’s deal is better than extending the process and risk Brexit not happening at all. This is the main reason that the Pound remains supported; No Deal is almost certainly going to be taken off the table this evening. And, as unlikely as it sounds, May’s deal could still get through.

If it doesn’t, then any extension could lead to a whole host of possibilities including May stepping down, revoking article 50, a general election, or another referendum. All of these would simply increase and extend the uncertainty and almost certainly send Sterling into a period of prolonged weakness. The most likely outcome, then, is May’s deal still getting through, sooner or later.

Getting the best exchange rates

If you need to buy or sell a foreign currency, and would like to speak to an expert, contact us today. We offer various ways to protect you against the current market uncertainty, and the rates of exchange we offer can be up to 5% better than your bank or existing broker may offer you.

Click here to make a free enquiry today.

Could we be close to a Brexit deal?

Sterling exchange rates have rallied overnight as it appears that concessions could be made between the UK and EU in the hope to get Prime Minister Theresa May’s deal through parliament.

MP’s will vote this evening on Mrs May’s Brexit deal after “legally binding” changes to it following last-minute talks with the EU in Strasbourg. Labour party members have already said they will vote it down and a number of Tory Brexiteers are taking legal advice on the changes.

What has the PM agreed?

Two key amendments have come from the PM’s meeting with EU officials. The first is a “joint legally binding instrument” on the withdrawal agreement which the UK could use should the EU try to keep the UK tied into the Irish backstop indefinitely. And the second is a joint statement about the UK and EU’s future relationship with a commitment to replace the backstop with an alternative by December 2020.

A key view on these amendments will be taken by Attorney General Geoffrey Cox this morning, reportedly around 11:30. His views could be an increasingly important factor as to how MP’s will vote in the commons later today. Many MP’s fear the backstop would keep the UK in a customs arrangement with the EU indefinitely and this is still very much the sticking point to get her vote passed.

Why has the pound rallied?

It would appear the market believes there is a real chance that Theresa May, with these concessions in place, could get her deal through parliament today. Key members of the EU have said this is the final deal. President of the European Commission Jean-Claude Juncker was quoted as saying:

“In politics sometimes you get a second chance. It is what we do with that second chance that counts. There will be no third chance.”

It really does appear as though this is a 50-50 vote, pass it or face a ‘no-deal’. I’m hopeful she will get this vote through and we may well see some further positive movement for the pound. We can but hope…….

Worried about Brexit affecting exchange rates?

If you are worries about how Brexit talks are affecting exchange rates, then contact us today for a free consultation with one of our expert currency brokers. We can discuss your requirements, explain how our service works, and provide you a quote to see how much you could save by using our currency services.

Click here to make a free enquiry