Will the pound continue to fall? (Dayle Littlejohn)

If you are buying or selling a substantial amount of sterling for the first time, this article outlines the factors impacting the sterling’s value and how to save money when you come to converting.

Throughout 2016, it is likely that anytime you switched on the news, Brexit talks were stealing the headlines. Since the turn of the year, the pound has declined for two main reasons;

The first is that at any point, the Supreme Court will give their verdict to whether UK Prime Minister Theresa May has the power to start the process of leaving the EU, or if she needs to obtain Parliamentary approval. The outstanding decision is sending jitters through investors, which means they are selling their sterling and purchasing safer currencies.

Secondly, during UK Prime Minister Theresa May’s press conference on Sunday 8th January, she stated that she aims to tackle immigration and leaving the single market looks inevitable. The consensus on the market is that anytime a key figure within the UK exclaims that the UK will leave the single market, sterling exchange rates fall.
The week ahead

The Supreme Court decision is looming but they have not released an exact date. Personally, I believe the Supreme Court will rule Mrs May needs Parliamentary approval and therefore this decision will not have a negative impact on the pound. However, if I am wrong and this is the first shock of 2017 the pound could fall like a stone.

On Tuesday 17th January 2017, Mrs May will address the UK public, and no surprise the agenda is Brexit. If she continues with a similar stance to last Sunday, sterling is set to lose further value, which means buying a foreign currency becomes more expensive.

It’s key to note that the Commons Brexit Committee made up of MPs, announced at the end of the trading week that Mrs May must confirm whether she wants in or out of the single market and the Customs Union before Brexit talks begin. Could she give direction this Tuesday?

On a weekly basis, the UK release economic data that shows how well the economy is performing. This week the UK are set to release:

Inflation – Tuesday 17th January 2017

Unemployment and Average earnings – Wednesday 18th January 2017

Retail Sales – Friday 20th January 2017

Since the start of the year economic data has been impressive for the UK. Out of the 13 data releases that tend to have a major impact on sterling 11 releases have exceeded expectations and only trade numbers have shown a decline. This shows to me that economic data is living in the shadows of politics. The economic data releases could cause small spikes for sterling, however, the direction of exchange rates will be dictated by Brexit news.

To summarise if you are buying or foreign currency short-term, there could be spikes in the market to take advantage of, however, the safe option is to convert sooner rather than later. If you are buying the pound I would recommend outlining your requirements to me so I can keep you up to date and then sit back and wait to see how far the pound falls.

When buying or selling the pound you also need to analyse the other currency you are converting before making your final decision. Feel free to email me the currency pair you are converting (GBPEUR, GBPUSD, GBPAUD, etc) the reason for your conversion (company invoice, buying a property) and I will provide you with further information [email protected].

How to save money

The company I work for helps the client understand the factors that are influencing the currency pair they are trading, whilst having the ability to offer exchange rates that the client wouldn’t be able to receive with their own bank. We have been in business for over 17 years and on a daily basis save clients money on currency transfers. Feel free to drop me an email or alternatively you can call the trading floor Monday morning and ask to be put through to Dayle Littlejohn to discuss your options 0044 1494 787 478.

Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.

** People are deal with on a daily basis are sole traders, financial directors, property buyers and sellers **