Sterling exchange rates have once again rallied off the back of comments made by EU chief negotiator Michel Barnier. In his comments yesterday afternoon Mr Barnier said a Brexit deal could be possible within the next 6-8 weeks, a potential lifeline for Theresa May and her government. He went to say that if both sides are “realist” there could be an agreement on the terms of the UK divorce bill by early November.
You will have seen the next key date in the Brexit diary is scheduled to be the 17th & 18th of October, as I wrote about in my post last week. It suggest this deadline may well be extended but has caused a significant degree of market positivity. To highlight this we are now trading at close to two month high against the Euro. Other large movements have been seen against the Australian Dollar (AUD) and South African Rand (ZAR) with the pound now trading at close to a two year high against these respective currencies.
Will the sterling spike last?
This is not the first time Michel Barnier has thrown an ‘olive branch’ to Theresa May. In fact less than two weeks back he was to make similar comments but the following day back tracked. As a result the gains from the previous day were wiped out. For me this cat and mouse scenario will intensify as we near the deadline of the 17th October. The market is very fickle and any comments, whether true or not, will be scrutinised and will cause the market to react. At the moment the pound as received a shot in the arm but this could be short lived. Any negative comments from those in senior positions and these current gains could be wiped out in a flash.
You can view live graphs for all our currency pairs that we can trade here. If you need to make a currency transfer and want to take advantage of this spike, or just get a quote, click here.