GBP/EUR at 2 year high
Good morning. Sterling/Euro rates remain supported above the €1.17 level, even though the Brexit process remains very uncertain. Last night, parliament voted in favour of a bill that will avoid a No-Deal brexit, and won by just 1 vote. In the coming days this could pass the House of Lords and become law. This means that it forces the Prime Minister to request a long delay to Article 50 if a deal is not agreed.
The news has been largely welcomed by the markets. As the chances of leaving the EU without a deal diminish, so does the chance of the Pound falling. For the rest of this week, focus will be on the cross party talks between May and Corbyn, to see if they can come to some agreement on how to break the current deadlock.
Brexit to continue driving the value of Sterling
Ultimately however, there aren’t many choices remaining. May’s deal, no deal, or a long extension are really the only 3 choices MP’s face. For the Withdrawal agreement to pass it will require some agreement on how to move forwards with regards to the future relationship with the EU. This is what will be being discussed with the cross part talks in the coming days. It could involve a customs union or a confirmatory referendum. The key to this week’s events is that a general election is now not likely, and this has also supported the Pound as it would have generated further political uncertainty.
With the Pound trading at very decent levels against the Euro and other currencies, clients that are risk averse may wish to secure a rate now to protect against Sterling dropping away again. Even if you don’t need your currency to be transferred for some time, you can freeze the current rate for up to 2 years by using a Forward contract.
Looking for the best exchange rates?
To get a free quote or discuss which way rates are moving, get in touch with one of our expert brokers. We provide a free telephone consultation to explain what is happening to rates to help you make an informed decision on when to fix. Our rates are up to 5% better than your bank or existing broker may offer, potentially saving you thousands of Pounds.