Currency Forecasts

Brexit extended, Pound falls

As Brexit has been extended and the Pound has dropped away, the question many of our clients are asking is when to convert Pounds to Euros? This week as expected, the UK and EU agreed to push back the Brexit date until 31st October. While removing the threat of the UK crashing out with no Deal today, extending Article 50 has also simply extended the uncertainty for business’s, investors and consumers, and the Pound has weakened as a result.

The political and economic uncertainty is now going to drag on for another 6 months. Donald Tusk advised MP’s not to waste the extra time they have been given. MP’s then cheered as Commons leader Andrea Leadsom re-instated their 2 week Easter holiday so nothing will be done until next month.

What next for Brexit and the Pound?

Who knows what this extension means and how it could impact the Pound in the coming months. There might be a new Conservative leader that would be Eurosceptic eg. Boris Johnson. The Bank of England will likely hold off any interest rate rises while they wait to see what happens. In realilty nothing much has changed. Parliament is still divided, the Government is still divided, there is still no majority for any kind of deal, and the extension has simply kicked the can down the road.

Will the Pound rise or fall in the coming months?

For these reasons above, we can’t see where any gains for Sterling are likely to come from. Uncertainty remains and with no resolution to the Brexit issue likely until the Autumn, it’s likely the Pound will either stay flat or fall against other currencies.

When to convert Pounds to Euros?

Many of our clients have been waiting to see what will happen, as any agreed deal would have likely strengthend the Pound against the Euro and other currencies. With no deal likely until after the summer, there is now little point in waiting. Those that need to convert Pounds to Euros in the next 6 months should get in touch today to discuss the options with a currency expert.

There are various ways you can protect against adverse rate movements, including Forward Contracts, Stop Loss orders, and Limit Orders. We offer exceptional rates of exhcange, and an online trading account so you can see the rates we offer 24/7. By comparing our rates with your bank or existing broker, you can see how much you could save by taking advantage of our competitive rates. For large transfers we usually save our clients thousands of Pounds.

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PM Theresa May in Brussels to discuss Brexit extension.

Prime Minister Theresa May is due to meet her European peers in Brussels later today in an attempt to negotiate Brexit extension.

It is expected she will ask for an extension beyond this Friday until the 30th June but most analysts believe the EU will reject this but offer a longer delay. European Council President Donald Tusk has urged the other 27 leaders to back a flexible Brexit extension of up to a year.

At the summit, which begins at 17:00 BST this evening, Mrs May will present her case for a short term delay with the option for the UK to leave at an earlier date if her Brexit deal (that has been rejected three times in the commons) can be agreed.

What could be the impact on the Pound?

It is widely expected that Mrs May will not be successful in negotiating a shorter term extension and the EU will offer a longer term, potential one year extension. However it will be the terms and conditions that the extension comes with that could have an impact on pound exchange rates.

Of course and extension will be significantly better result for the pound than a no deal. Should the UK go crashing out of the EU on Friday with a no deal then the pound, in my view, could fall by 5% or more.

Should we agree an extension but the terms are not deemed as favourable, which is highly likely as the EU will not make this easy, then I still fear the pound could fall as a result. Either way there could be some significant movement in the next 48 hours.

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.

Brexit: Will the Pound go up or down this week?

Good morning. In today’s post I’ll take a look at the week ahead and events that could affect Sterling exchange rates. The most important news will likely to be any developments with Brexit, although economic data will still have an impact. Let’s first take a look at what could happen to the Pound with regards to Brexit, before moving on to the scheduled economic data releases.

Brexit deadline this week, what could happen to Sterling?

Last week Sterling fell in value as markets were concerned that with less than a week to go, there is still no resolution to the current deadlock. As MP’s continued to bicker about what kind of Brexit deal they want, we now have less than 5 days before the UK crashes out with ‘No Deal’. This scenario is still unlikely, but remains an outside possibility. This Friday is the deadline, and parliament need to agree a way forwards before this weeks EU summit, and pass the withdrawal agreement. If this happens, the Pound is likely to rise in value by up to 3%.

What happens if no deal is agreed, and how could this affect the Pound?

If no deal can be agreed, then there are 2 options left. Leaving with no deal is still the current legal default, and if this starts to look likely, then Sterling would plummet in value by up to 5%. However this is still unlikely, as if no agreement can be made then we think that the UK will request a long extension to the Article 50 process to avoid a No Deal scenario. If this were to happen, it’s hard to know what effect it would have on the Pound. It could weaken Sterling due to the extended uncertainty it would generate. On the other hand, the fact that it avoids No Deal and would push the UK towards a so called ‘softer Brexit’, could lend some support to the Pound, helping to keep rates from dropping too much.

So after nearly 3 years of negotiations, this week is a very important one for how things move forwards. In addition to Brexit developments, there are also a raft of economic data releases that will also affect the currency markets. These are outlined below. If you have a currency requirement and would like to discuss the market with an expert, or just get a quote to see what exchange rate we can offer you, contact us today.

Economic Data releases that could affect exchange rates

Monday 8th April – There is little on the calendar today to affect the currency markets. Sterling will be moved by any signs of a deal on Brexit. We have already had some better than expected Germany Trade Balance figures that has strengthened the Euro a little. This afternoon at 2pm the USA releases Factory Order numbers that could move GBP/USD.

Tuesday 9th April – The only UK data of note is Retail Sales numbers from the BRC, although it is a minor reading and as such, unlikely to have much of an impact on the value of Sterling. Elsewhere, Australia releases Home Loans and Investment lending figures. There is also a speech by a FED member that could affect the US Dollar.

Wednesday 10th April – Things start getting a little busier today, with 3 key releases from the UK: Industrial Production, Manufacturing production, and the latest HDP numbers. Markets expect flat growth for all 3 readings, so any positive figures should help the Pound gain. The ECB have an interest rate decision, but we expect rates to be left on hold. The policy statement that follows could generate some Euro volatility. The European Council summit on Brexit also starts today which is the main event of the week. Over in the USA we have inflation numbers, a monthly Budget statement, and the FOMC minutes, all of which could affect GBP/USD rates.

Thursday 11th April – The main news today comes from the USA in the form of Jobless Claims, and speeches by key FED members that could influence future interest rate movements. Australia also has a speech by a central bank member and inflation figures. New Zealand has Business PMI and Retail Sales figures.

Friday 12th April – Brexit day. This is the deadline for the UK to agree a deal to leave the EU. If a deal is agreed then the Pound is likely to strengthen. If the UK leaves with no deal, expect Sterling to plummet in value. We also have EU industrial production figures and a consumer sentiment measure from the USA.

Speak to an expert about your currency requirement

If you need to transfer a large volume of currency, get in touch today to speak to an expert currency broker. We can explain what is moving the rate, give you our view on which way rates are headed, and provide you with a quotation to compare with your bank or existing broker. Our rates are up to 5% better than your bank or existing broker may offer, potentially saving you thousands of Pounds.

Click here to get a free quote today

Pound falls as Brexit extension likely

Just yesterday, GBP/EUR rates were holding firm above €1.17, but the wind has now been taken out of the Pound’s sails. It’s looking quite likely now that Article 50 will be delayed, possibly by up to a year. This morning the PM requested an extension to 30th of June, but it’s expected that the EU might only approve a much longer extension. As a result the Pound has been sliding all day, and at the time of writing GBP/EUR is at €1.16 and GBP/USD is at $1.30.

Will the Pound rise or fall due to Brexit?

The road to Brexit is a long and winding one, and who knows which direction it will take in the coming weeks and months. The EU want to give us a long extension, France don’t want to and could easily veto it, while the UK want one until the end of June. Cross party talks may or not lead to a deal, which may or may not be a softer Brexit. There might or might not be another ‘confirmatory’ referendum, and would could still end up leaving with no deal next week. Or not. So nearly 3 years on from the vote to leave, it’s still very unclear what is actually going to happen, with the UK still bickering about what type of deal it wants. Clear as mud.

Pound/Euro Forecast

Ultimately, it’s still likely a free trade deal will be agreed, however it’s probably going to take a long time. A poll among FX strategists by Reuters indicated that if a Brexit deal looks likely, the Pound could rise by 3%. If negotiations fail, then they predict the Pound could fall by 5%. That puts the GBP/EUR forecast in a range of €1.10 to €1.20, which is on a €300k conversion equates to a difference of around £23,000.00.

Do you need to buy or sell currency in the coming months?

As you can see from the Reuters poll, there could be large swings in the value of the Pound in 2019. Just sitting back and hoping the rate will move in your favour is not recommended. Hope is not a reliable economic tool and it could end up costing you dearly. A better approach is to speak to a currency expert to discuss your requirement, time-frame and attitude to risk. We can then explain your options, so you can consider what steps to take to protect against adverse market movements.

To discuss your currency requirement with an expert, contact us today. Our consultation service is free, and our exchange rates are extremely competitive.

Best Exchange rates for GBP/EUR in 2 years

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.