Pound rises on Sunday Times report of Brexit Deal

The Pound has had a good start to the week, rising to €1.1430 against the Euro and remaining above $1.30 vs the US Dollar. The rise in the value of Sterling comes as the Sunday Times reported that the UK and EU were edging towards agreeing a deal. A key part of this were reports that as part of the withdrawal agreement, there would be a UK wide customs agreement. If this proves to be the case, then it removes the need for the Irish backstop, which has been a sticking point to moving negotiations forward. Theresa May holds a cabinet meeting on Tuesday, and there may have been enough progress for the EU to announce a special Summit.

There are also reports that the two sides are much closer to coming to an agreement than had been thought. If so, and if there is an EU announcement of a Brexit summit, then it would probably send the Pound higher still. As I mentioned last week, when an agreement is announced it will remove much of the uncertainty that has been keeping Sterling weak. It’s not a done deal yet however. There could still be some bumps in the road, due to the fact that any agreement would need to be voted through parliament. Given Theresa May’s perilous domestic political situation, this might prove difficult.

Brexit, then, remains the main driver for GBP exchange rates. Anything that signals a deal is close sends the Pound higher, as we have seen over the last week. Putting the UK’s withdrawal from the EU to one side for a moment, I’ve outlined below other things that could affect the Pound in the week ahead. If you want to know which way rates are moving and get the best exchange rates, get in touch with one of our expert currency brokers today.

This week’s economic data releases

Monday 5th November – We have already seen UK Services sector numbers this morning. These were worse than expected, and would normally have sent Sterling lower. Optimism over a BRexit deal however counteracted this and the Pound is up on the way. Today is rather quiet on the data front, with only some US PMI numbers the only release of note, at 2:45pm this afternoon.

Tuesday 6th November – A quite day for the UK with the only release some minor Retail Sales numbers. However Theresa May holds a cabinet meeting about Brexit, so any news here could affect Sterling. Other than that, GBP/EUR will therefore be driven by events from the Eurozone. We have various measures of inflation around 9am, and a better than expected reading could strengthen the Euros. Elsewhere, we have Unemployment figures from New Zealand that could affect GBP/NZD prices.

Wednesday 7th November – New Zealand has an interest rate decision today. It’s expected they will leave rates on hold at 1.75%, but any comments that are in the accompanying statement could move GBP/NZD prices.

Thursday 8th November – The EU Releases Economic growth forecasts today. We think that the EU economy will not fare will in the coming months. If the forecasts are lower than expected, it could weaken the Euro and help push up GBP/EUR prices. GBP/USD rates could also move today as we have the latest FED interest rate decision. No change is expected, but any hints of another rate hike in early 2019 could strengthen the USD.

Friday 9th November – After a very quiet week for UK data, today gives investors much more to chew on. At 09:30am we’ll see the latest GDP numbers, and the expected number is a monthly rise of +0.1%. A higher number would push the Pound higher, and vice versa. We will also see the latest Industrial and Manufacturing production numbers. A modest rise of 0.1% is expected. A higher than expected reading would push the Pound up.

Getting the best exchange rates

When converting a large sum of money from one currency to another, getting the best exchange rate is crucial. A fractional improvement in the rate you achieve could save you thousands of Pounds. We have been helping clients achieve exceptional rates of exchange since 2005, and typically our rates are 2% to 3% better than your bank or existing broker may offer. To discuss how we can help you and to get a quote, contact us today.

 

One Comment on “Pound rises on Sunday Times report of Brexit Deal

  1. Pingback: Sterling pushes to a 6 month high, will it last? - Currency Forecasts

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