A turbulent time for the world’s currency markets!

The recent rise in the value of the Pound has been a welcome relief for many Euro buyers in the last 7 days. There have been a few contributing factors owing to this recent resurgence, the most notable recent data of note was the UK Gross Domestic Product figure coming in at 0.5% this has further supported the conclusion that the economic shock of leaving the European Union has so far not been as negative as initially speculated.

With President Trump continuing to dominate the world stage the Pound has continued to quietly recover as the US dollar slips on a chaotic first few days after the inauguration. With a controversial immigration ban dominating the headlines this morning along with a financially suspect plan to build a 2000 mile long wall between the US and Mexico. I expect Dollar weakness to continue for sometime. With a litany of policies to still be enacted by President Trump volatility will be the key word in US economics this year.

I believe the next factor to decide the path of the Pound will rely heavily on whether Theresa May is able to trigger Article 50 at the end of March and start the UK’s formal exit from the EU. Though the Supreme court has now finished weighing in on the Parliamentary vote against Mrs May this is unlikely to have much of a real effect on her timetable as she still has the majority of support from MP’s on Brexit.

Given this I believe we are likely to see a weakening Pound as we approach the end of the March making current levels attractive at the moment. In the immediate short term, tomorrow sees a raft of economic data coming out of the Eurozone and any negativity is likely to further bolster the Pound if only for a short while.

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Sterling drops sharply on May’s Brexit comments.

In the last 48 hours the Pound has lost nearly 3 cents against the Euro and significant amounts against all other trading pairs. The Turkish Lira is the exception, which has made some gains, due to Turkey’s unstable political and economic picture.

This sudden drop in the Pound can be attributed to the current UK Prime Minister Theresa May’s comments on the UK’s stance on Brexit. She indicated that it was likely to be a “Hard Brexit”, whilst not saying directly we would be leaving the single market, she certainly hinted that it wouldn’t be a gentle exit. This has shaken market confidence in the Pound resulting in the drop to below 1.15 (market level) against the Euro.

With the Supreme Court expected to give their final decision which could possibly overturn the High Court’s decision on whether MP’s should have a say on Brexit. This could potentially free up Theresa May to keep her cards closer when negotiating the UK’s exit from the European Union. Likely to be the so called “Hard Exit” highlighted by the general media, this would impact further on the currency markets causing further drops for the pound and taking us below 1.12 GBPEURO.

In real terms this means continued weakness for the pound, lasting well into March. Theresa May has highlighted the 31st of March as the date Article 50 will be invoked, on this day I expect further volatility for the Pound against most major currencies.

Though it’s not all doom and gloom for euro buyers this year. The Euro zone will be facing fresh elections from France and Germany to name a few and with far right influence appearing to be growing across the European Union any shock results are likely to have a negative effect on the Euro. This will likely lead to spikes in buying rates for those holding Pound sterling and should be acted upon.

Across the pond, Donald Trump is to be officially sworn in as the 45th US President of the United States of America on the 20th of January. The markets have had a mixed reaction to the recent election and Mr Trump’s controversial policies. I expect further volatility with big swings either way against the pound as these polices come to fruition, or don’t….

In the short term, if you’re planning on an early getaway this month, Thursday will be the next big day for the markets, with a possible Supreme Court decision expected, coupled with the ECB Monetary Policy meeting at midday. I expect big swings this day and I’m leaning towards negativity for the Pound so it may be prudent to buy your holiday money before this if you’re travelling at the weekend.

For any further information raised in this blog or help on any other currency matters please feel free to email me at accounts@currencydeals4u.co.uk.

 

 

 

 

 

 

HAPPY NEW YEAR FROM CURRENCYDEALS4U!

Happy New Year to all our regular customers and all those joining us this year!

With Brexit, a controversial US President and political instability across the Euro zone 2017 is shaping up to be as interesting if not more so than 2016.

As part of our commitment to high quality customer service we aim to bring you currency market related news and analysis to help you get the best deal on your holiday money.

We are also proud to announce we will be releasing an app this year to help you order your currency quickly and safely and most of all at a great rate of exchange! We are also adding a few features we think you will find extremely helpful on your travels.

So stay tuned and we hope your have a prosperous and exciting year ahead!