Pound under pressure ahead of EU summit

Sterling hit an 8 week high against the US Dollar yesterday, but has dropped back a little this morning. The UK’s major banks passed the ‘stress test’ showing that they would be able to cope with a hard Brexit, and this helped support the Pound a little. This morning however, GBPUSD has dropped back to $1.33 and GBPEUR is around the €1.1170 mark.

Will the Pound rise or fall in December?

Markets are starting to get a little wary about the upcoming EU summit due in mid-December. Quite simply, if it’s decided that Brexit talks
will move to start discussing a future trade agreement, then I would expect GBP/EUR rates to rise to around the €1.14/€1.15 mark. If however the EU decides that not enough progress has been made with regards to the divorce bill and Irish border, and refuse to move talks forward, then a ‘Hard Brexit’ scenario becomes more likely. In this scenario, I would expect GBP/EUR rates to drop back to around the €1.08 mark. Either way, the coming weeks are likely to be rather volatile for Sterling.

Do you have an upcoming currency requirement?

If you need to buy or sell a large amount of currency, then there are options available to help protect you against rates moving the wrong way. For example, you can freeze the current rate using a ‘Forward Contract’ that guarantees the rate for up to 2 years, protecting you against market volatility. To discuss this in more detail or simply get a quote to see what rates we can offer, get in touch today. 

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