Currencies usually move when something happens, or promises to happen. When Boris Johnson came back from Brussels with a deal, whether you think it a good deal or not, the pound rallied to one of its highest rates of the past three years. So surely when he got it through Parliament with a decent majority last night, albeit with a timetable not to his choosing, you might think it would rally even further? After all, this was a major advance on anything Theresa May could manage.
Not so much. The pound actually fell slightly. Parliament’s vote for more time means that amendments can be made to the bill to send it in a different direction, such as a confirmatory referendum.
Even if and when the Withdrawal Agreement does pass in its current form, there is no real way of knowing whether its passage hasn’t been quietly been priced into the value of sterling over the weeks and months. So we cannot necessarily expect a significant boost to the pound. There is also no way of knowing what might happen in the now-more-likely general election before Christmas. With no deal off the table, assuming the EU27 agree the extension, the Labour Party has no reason not to agree.
So… where does that leave you and your plans to buy abroad? We would argue, in exactly the same place as ever, in your own hands. We can lock in the exchange rate for you for the next year with a forward contract, allowing you to know exactly what your money is worth abroad.
Speak to your trader today on 020 7898 0541.
