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Fears of a ‘Hard Brexit’ push the Pound downward as GBP/EUR hits a new low for 2016 (Joseph Wright)

Monday, October 3, 2016 10:24
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(Before It's News)

News that the UK’s Prime Minister, Theresa May will begin the process of initiating the UK’s separation from the EU in the early months of 2017 has sent the Pound steeply lower today.

The Prime Ministers announcement that she plans to invoke Article 50 earlier that many had hopes came out over the weekend, and the Sterling weakness has gradually picked up throughout the day with the GBP/EUR pair significantly hitting a new 52 week low, which is also an almost 3 and a half year low.

Personally I think that today’s sell-off could have been worse had the markets not already been warned about this move by Theresa May. The Pound was sold off within the last 2 weeks when Boris Johnson suggested that Article 50 would be triggered around the beginning of next year, and I think this has softened the blow.

Interestingly there was some positive economic data released from within the UK which has perhaps softened the blow for the Pound today as well. This morning Manufacturing PMI figures were released which provide us with an overview of sentiment/business expectations within the Manufacturing in the UK and the figure came out positively and well above market expectations.

Despite this release, the Pound is still weak which I think offers us an indication of GBP’s likely movements in future. If economic data is beating expectations yet the Pound is still falling, negative sentiment may well continue to weaken GBP exchange rates.

It’s also worth noting that Credit Suisse this weekend highlighted a 1.10 price target in the following few months for the pair.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the U.K, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me (Joseph Wright) directly on jxw@currencies.co.uk and I will be more than happy to contact you personally to discuss the various options we have available to you.

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