Pound remains toxic as Brexit talks stall…

12-10-2017

The Pound has hit major roadblocks once again after recovering from the 8 month lows it faced a few months ago. The main reason for this will be clear to everyone by now as it continues to dominate the media.

Brexit. The Pounds short to mid-term future is being governed by the progress of the Brexit negotiations or lack of as seems to be the case at the moment. PM Theresa May has hinted that plans are under way for the outcome of a “No deal scenario” where essential we crash out on the 29th of March 2019 without a formal agreement in place with the EU to prepare Trade, Immigration etc. This has shaken investor confidence in the UK economy as big business trickles away overseas. This is not a favourable outcome as the chaos caused by scrambling for trade deals and securing borders etc would surely weaken the Pound further. As it stands presently both sides seem to be deadlocked and any meaningful agreements on Trade, Exit bills or immigration look unlikely before Christmas if at all.

The IMF (International Monetary Fund) released their growth forecasts this week, while the world forecast is up from 3.2% to 3.7% the UK has not done so well having been downgraded from 1.9% to 1.7% this has further weakened the Pound with the current Market rate sitting at 1.1094 GBPEURO at the time of this articles release. The Bank of England’s governor Mark Carney has indicated that an interest rate hike could be likely in November. With unemployment at its lowest levels since the 70’s but the average wage declining and inflation soaring if this is just speculation and a rate hike doesn’t materialize in November we could see further losses for the Pound. However if The BOE does decide to raise interest rates the market will likely rally around the Pound making for some attractive opportunities for buying currency.

Though the UK does seem to be under fire at present there are issues overseas that could make the Pound worthy of investors. The Catalonian Independence referendum continues to stay tense. With Catalonia’s president, Carles Puigdemont seemingly defiant on taking Catalonia out of Spain but then drawing back by offering to negotiate with Madrid before taking any further action it is difficult to predict how this will play out but will surely have the other EU member countries nervous. If Catalonia were to succeed in gaining independence then this could reignite debate in other countries with secessionist problems in the European have including the UK, Belgium and Italy. A fragmented EU would not be positive for the EU and would see the single currency weakening.

During these unpredictable times we at CurrencyDeals4U would like to offer our clients the best service and deals we possibly can. So till the 20th October if you use the following code when reserving your currency on our website under £500 you will still receive the improved rate regardless of the amount! We hope this will make your money go further and look forward to dealing with you soon.

Coupon Code – OCTOBERSALE

For any questions on any of the issues raised in this article or information on obtaining your holiday money please contact me at accounts@currencydeals4u.co.uk.

Matthew Sinclair

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