Sterling Forecast – Brexit Sentiment Continues to Drive Sterling’s Value (Matthew Vassallo)

The Pound has been fairly well supported of late, buoyed by reports indicating a potential breakthrough in Brexit negotiations.

This good feeling was a continuation of recent trends, with the Bank of England (BoE) indicating that they may be looking to raise interest rates earlier than many had anticipated.

This helped to boost investor confidence in the Pound, which up until last week had made inroads against a majority of the major currencies. GBP/EUR rates spiked towards 1.14, whilst GBP/USD moved back above 1.41 last week.

It seems as though investors have now factored in much of these positive rumours into Sterling’s current value but whether we see a further increase this week is certainly debatable.

Despite this recent improvement, if we scratch below the surface all is not well behind the scenes. Reports of splintered Tory government are not new but this story now seems to be gathering momentum. UK Prime Minister Theresa May was very bullish in her recent public address and her behind closed door meeting with senior Conservative MP’s last week was meant to be a success.

However, this seems now not to be the case following a report in the Times, which indicated three separate cabinet ministers warned May that the current government could collapse this year. Tory rebels could look to back Labours plans for full membership of the customs union, once the UK finally separates itself from the single bloc.

This goes against the PM’s current stance and as such, investors may not react positively to her speech on Friday even if she remains bullish about the UK’s current Brexit position.

My overall opinion remains unchanged and that is those client holding Sterling should be looking at short-term spikes in the market, rather than hold out for longer-term sustainable gains.

If you have an upcoming Sterling currency transfer to make, you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on [email protected] to find out all the options available to you ahead of your currency transfer.