Written by Canarian Weekly Business
THE pound has remained highly volatile over the past couple of weeks, with ongoing Brexit uncertainty leaving the currency on the defensive, against its peers.
This volatility saw GBP/EUR trade in a range of 1.13-1.12 euros, and resulted in EUR/GBP holding at £0.88. GBP/USD fell from $1.28 to $1.27 over the last two weeks, while EUR/USD has slipped from $1.14 to $1.13.
The pound continued to be met by volatility throughout the last half of November, with the EU’s sign-off on a withdrawal prompting some temporary gains, before the Bank of England's gloomy Brexit analysis sent GBP exchange rates reeling, once again.
Concerns over a prolonged slowdown in the Eurozone have remained a major concern for EUR investors in recent weeks, with the euro facing pressure, as November's PMI readings indicate the bloc is struggling in Q4.
Meanwhile, the US dollar remained on the offensive over the second half of last month, apart from a slight blip at the end of November, in the wake of some dovish remarks from Federal-Reserve Chair Jerome Powell.
The pound is likely to remain guided by Brexit developments over the next couple of weeks, with a vote on Theresa May's Brexit deal, on 11th December, likely to be a key test for GBP investors.
Any rejection of the deal is likely to put the UK on the path towards a no-deal Brexit. EUR investors will be focused on the European Central Bank's final rate decision of 2018, with the euro potentially softening, if the bank strikes a more-cautious tone, given the recent slowdown in the Eurozone.
Finally, the US dollar may remain elevated in the coming weeks, if political uncertainty in Europe continues to drive investors to safe-haven currencies.
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