Sterling has tumbled aginast the Euro and US Dollar overnight, following Theresa May’s speech outlining her changes to the withdrawal agreement and outlining her Brexit plan. As rumours swirled that she would announce a vote on a second referendum, the Pound initially gained, briefly reaching €1.1450 agianst the Euro. Once she had delivered her speech however, the Pound fell back. As it became clear that many still oppose the withdrawal agreement, the Pound fell further. This morning, the Pound is at a 4 month low against the Euro and US Dollar, with rates at €1.1350 and $1.2668 respectively.
We think it could. It could be that the bill isn’t even voted on, with some expecting the PM to quit next Monday. If she doesn’t she could be forced out by MPs opposed to her deal. There doesn’t seem to be any will in Parliament for a second referendum, and if she steps down it’s likely we’ll see Boris Johnson as PM. Markets fear he will pursue a harder form of exiting the European Union, and it’s this uncertainty that is pulling the Pound lower and lower.
I actually think that if Boris does get the keys to number 10, we’ll probably see him backtrack on leaving without a deal. It gets the support of Eurosceptic MP’s but does not have the support of the wider Conservative party, or indeed other MPs in parliament. It’s more likely that he will become more moderate and try to re-negotiate a better deal with the EU, one that MPs might be able to support.
But all of that is a long way off, and in the meantime, we have political uncertainty. Markets do not like uncertainty and while things are unclear, the Pound could well come under further pressure in the short term.
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GBP/USD exchange have tumbled to their lowest levels against the US dollar since January. We have now seen the pound fall just shy of 5% since the end of March and 3.9% in the last three weeks.
This movement can have a significant impact on the cost of a large money transfer overseas. A £250k exchange to US dollars would have bought you $12,500 more at the beginning of May when compared to the current levels.
As my colleague Alastair alluded to in his post yesterday Brexit issues and cross party talks failing, it looks decreasingly likely that Prime Minister Theresa May will struggle to get her latest Brexit bill through the commons on the 3rd June. It is therefore likely she will stand down and a leadership contest will begin. With a high chance her replacement will be a staunch ‘Brexiteer’ a harder Brexit without a deal becomes increasingly more likely. To compound this the US dollar has also found support through its ‘safe haven’ tag – with on-going trade war tensions between the US and China, along with Brexit, it is likely the dollar will continue to benefit.
Even if you don’t need to make your transfer right now, we offer the option to freeze the current rate for a future date by lodging a 10% deposit. If you would like to have a chat about how we can help you with your currency requirements, contact us today.
Sterling has started this week as it ended last week, dropping against the Euro and other currencies. This afternoon the GBP/EUR rate has dipped into the €1.13’s which is a fresh 3 month low. The graph below shows how the Pound/Euro rate has moved in the last 2 weeks, dropping 3% and adding around £8,000.00 to the cost of a €300k property overseas.
The main reason is, as I’m sure you will be aware, Brexit. Last week saw cross party talks collapse, and markets now await May’s latest attempt to get her deal voted through parliament in a few weeks. There is little expectation the deal will go through, having been voted down 3 times already. The Prime Minister said that the new vote will be a newer offer that has been improved, but any changes are likely to be cosmetic. We can expect Labour to vote against it, and as the parliamentary arithmatic hasn’t changed, the outcome is not likely to have done either.
So, with the deal expected to get defeated again, what next and how will it affect the Pound? If it is defeated, May’s time will be up, and now speculation is turning to who will replace her. The bookies have Boris Johnson as the favourite, and this is what is causing the Pound to fall. He is a well known supporter of Brexit, and if he were to become the next Prime Minister, it’s likely a harder exit without a deal becomes more likely. Markets are vey fearful of this due to the uncertainty and disruption it could cause, and the Pound is falling as a result.
The EU have also said that they will not re-negotiate their deal with any new leader, so the options are pretty much limited to a hard brexit, or a new referendum.
The recent movements show how quickly exchange rates can change, and avoiding this is crucial when exposed to the currency markets e.g. when purchasing property overseas or paying international invoices. If you need the best Sterling exchange rates and are worried about the rate continuing to fall, get in touch today to discuss how we can help you avoid the rate moving against you and get a free quote.
Pound/Euro exchange rates have fallen below 1.15 today following news that Prime Minister Theresa May will be outlining her next steps for Brexit and taking her new plans to the vote in June. The vote – which will take place when MPs return from half-term recess – would bring the withdrawal agreement into UK law via the Withdrawal Agreement Bill.
In response to this news Labour party members were quick to state that they would vote against the the new plans as cross party tensions remain. As a result sterling exchange rates have fallen to their lowest levels against the single currency since February and fallen to nearly 1.28 against the US dollar. This all comes following news that UK unemployment had fallen to its lowest level in 45 years, just showing Brexit will dominate movement for the pound and highlighting how vulnerable the pound is.
The first port of call for many clients that need to exchange currency is to approach their bank. Clients will often lose out by doing this, as bank rates are usually quite poor. By using the service of a specialist currency broker, you can often save in excess of 2 to 3%. When converting a large sum, this can save you thousands. When choosing a broker, ensure you are working with one that is fully authorised by the FCA. Registration usually takes a few minutes by completing a short online application. When the account is activated, you are then in a position to get a quote
I would recommend registering with two companies in order to guarantee you are getting the best price. There is very little point in registering with 4-5 companies, as by the time you call round and decide the best price, you may actually be in worse position than when you started as the market has moved! Many brokers will simply quote you the ‘mid-market’ rate, so make sure you are quoted an actual trading price. It might even be worth seeing if they can guarantee you a ‘fixed spread’. This way you will always know at what margin you will trade.
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Good morning. In today’s post we’ll have a look to the week ahead and see what economic data releases are due that could affect GBP exchange rates. GBP/EUR has been rather flat of late, while the markets await any news that could break the Brexit deadlock. It could be that cross party talks collapse this week, and that would probably weaken the Pound. Read on to see what else is happening in the coming week that could move the markets. If you need to make an international transfer, then contact us today to discuss how we can help you achieve the best exchange rates.
Monday 13th May 2019 – There is nothing of note on the calendar today from either the UK or EU, so we expect GBP/EUR to remain flat in the absence of any Brexit news. This afternoon we have some speeches by members of the US and Canadian central banks that could influence GBP/USD and GBP/CAD respectively.
Tuesday 14th May 2019 – Today could affect Sterling, as we will see the latest jobs data from the UK including Average Earnings, the Unemployment rate, and the Claimant count change. UK unemployment is the lowest in decades and wages are growing faster than inflation. If this continues it could help the Pound. Elsewhere, GBP/EUR could also be affected by EU wide measures of Industrial Production and an Economic Sentiment Survey.
Wednesday 15th May – There’s nothing for Britain today, but GBP/EUR could still move on numbers from the Eurozone. Gross Domestic Product (GDP) figrues are release for Germany and the Eurozone as a whole. We expect quarterly growth of 0.3%/0.4%. If higher, the Euro would strengthen and pull GBP/EUR lower. Elsewhere, for those watching GBP/USD and GBP/CAD, we have US Retail Sales, and Inflation numbers from Canada .
Thursday 16th May – It’s quiet again in the UK so focus for GBP/EUR will be on speeches by various members of the European Central Bank (ECB). Any dovish comments would weaken the Euro, while any hawkish signals that stimulus could be scales back would strengthen the Euro and bring the GBP/EUR rate down. We’ll also see a speech by a Bank of England (BoE) member. GBP/AUD could also be affected by the latest Australian jobs figures.
Friday 17th May – We end the week with a raft of inflationary measures from the Eurozone, which could impact future interest rate movements. Other than that it’s quite quiet on the data front.
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