Fresh two and a half month highs were reached earlier today on buying Euro and Dollar exchange rates following surprising and contentious comments made by the men spearheading the Brexit project.
David Davis and Boris Johnson, the Brexit Secretary and the Foreign Secretary respectively, have come out this morning seemingly having taken a U-turn on key positions which financial markets pounced on immediately. At its peak GBP/EUR bridged 1.1950, GBP/USD breached 1.2690 and GBP/AUD just pipped over 1.7150.
Financial markets have made no secret that they want the UK to remain part of the single market. Collectively there is greater appetite for investment in the Pound if they know the transition away from the EU is expected to be gentler – hence the term ‘soft Brexit’.
Johnson, as was shown all over major newspapers today, has stated privately to ambassadors that he was ‘all for’ free movement of people. And David Davis has stated that the UK will likely continue to pay for preferential access to the single market today in a statement in the House of Commons.
An utter reversal on both Government and Boris’s own public opinions stated recently, and the greater likelihood of a softer Brexit suggested in the comments saw the Pound soar against all major pairings, with buying Euros and US Dollar buyers being the key winners.
However, as the day waned on the ‘run’ on the Pound began to lose its momentum and eventually fell back heavily. Speculators taking profit from such serious movements today are seen as the root cause.
Moving forward, GBP/EUR, GBP/USD and GBP/AUD exchange rates will need to navigate the upcoming Italian Referendum and US non-farm payroll figures.
The US figures are to be released tomorrow lunchtime and the Italian Referendum results are expected on Monday.
The referendum will be key for buying Euro rates as a NO result will likely mean the rise of the far right over in Italy, and create further questions marks regarding the Eurozone’s future. Polls are currently neck and neck, but heavy movement is expected on Monday either way. As such a premium will be put on being able to move quickly on Monday to secure tempting levels or protect yourself from any sudden downturns.
I strongly recommend that anyone with a foreign currency requirement using Sterling should contact me on email@example.com to discuss a strategy for your transfer to safeguard it from any adverse movements and to discuss how best to seize any particularly tempting levels which emerge in the short term.
I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on a prospective transfer.
I will also remind our regular readers that if you are looking to be securing an exchange rate for a future purchase based on the recent improvements in the Pound, this is easily done using a forward contract, whereby the rate is pre-booked at today’s levels to be utilized for a later date. Again simply email me on firstname.lastname@example.org to discuss this further.