Sterling rocked by chaotic month in UK politics

2019/09/26 14:04:58 Written by Canarian Weekly Business
STAYING on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for, over the next month. There have been some significant movements in the currency market, over the last couple of weeks, with GBP/EUR trading between 1.09 and 1.13, and EUR/GBP retreating to 0.88. Meanwhile, GBP/USD recovered from a three-year low of 1.19 to 1.24, whilst EUR/USD fluctuated around 1.10. The pound has been met by some dramatic swings over the last month, hitting some key levels against its peers, as it was rocked by UK political developments. This began with Boris Johnson’s announcement that parliament would be suspended for five weeks, beginning early September, a move widely perceived as attempting to frustrate attempts to block a no-deal Brexit. Unsurprisingly, this knocked sterling sentiment, even sending GBP/USD plummeting to a three-year low. However, subsequent movement in the pound has been largely positive, as Johnson faced a number of setbacks, thought to lower the odds of a no-deal Brexit. This included the loss of his majority in parliament, the passing of a bill compelling him to seek another Brexit extension, and the rejection of his calls for a snap election. Adding to the upside in sterling was also a string of upbeat UK economic data, including a robust GDP reading, which helped to dispel concerns of a recession. Meanwhile, the ECB’s stimulus measures were ultimately received positively by markets, helping to buoy the single currency, going into the second half of September. What do you need to look out for? UK political developments are likely to continue to act as the main catalyst of movement in the pound, as we get closer to the current Brexit deadline, on 31st October. The upcoming EU summit in mid-October will likely be key for GBP investors, as all bets will be off if Boris Johnson fails to secure a deal by then. Meanwhile, the euro may struggle to find support over the coming month, if German data remains in the doldrums. Europe’s largest economy looks to be teetering on the edge of a recession, with any additional sign that growth in the country will contract again in the third quarter, likely to dent the appeal of the single currency. At Currencies Direct we’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news, or how it could impact your currency transfers. Since 1996, we’ve helped more than 250,000 customers with their currency transfers. Just pop into your local Currencies Direct branch, or give us a call to find out more. T: +34 922 971 781 E: W:m