Sterling has risen as investors get excited over the potential for the UK to avoid a hard Brexit. Investors have become very fearful of the full implications of a hard Brexit. Essentially access to the single market is a key factor in the strength and attractiveness of the UK economy. The rates for the pound have now increased as this prospect becomes shaky but will it last? If you have a transfer to make in the future there is all the important US election next week and it could easily be the end of this current surge in sterling’s value.
The High Court have ruled that the UK government will have to seek parliamentary approval to invoke Article 50 the legal mechanism to trigger Brexit. The court ruled that Theresa May must go to the House of Commons and Lords to get a rubber stamp of her plans. This means that whilst Brexit is still likely to happen the Government might be forced to water down the proposals. All in what this means is much more uncertainty for the pound!
Next week is the US election and I expect the pound will fall further eroding these excellent gains. Typically a currency will strengthen once an election is over as you get certainty of the situation. In this case the US dollar may rise and this will weaken the pound. Sterling’s most heavily traded currency pairing is GBPUSD so if GBPUSD drops lows because the US dollar is rising it will weigh the pound down against other currencies.
This market is still very tough to call but sterling is not out of the woods with the latest UK political developments. If you are considering a currency transfer in the future you may benefit from the experience of a currency specialist who can keep you up to date with the market and all of your options. I have worked here for almost ten years and lent my comments and insight to newpapers and also BBC News.
For more information at no cost or obligation please speak to me Jonathan Watson by emailing email@example.com or filling in the form below.