It’s business as usual on the Brexit front this morning, with nothing settled on so-called Super Saturday. The government seems to think it “has the numbers” when the Prime Minister’s deal does finally come to a vote, perhaps this evening. But there are still various battlegrounds, including how many Labour MPs will defy the whip to vote with the Conservatives and what the DUP will do to bring down the deal.
Various groups of people are now scrambling to understand exactly how Boris Johnson’s deal with the EU differs from Theresa May’s. Economically the division is between the currency markets that want the certainty of a deal – almost any deal – and the business world that now worries how the revised Withdrawal Agreement will increase “friction” as goods travel across borders, and the costs of doing business with Northern Ireland. Hence the customs union is back on the menu as an amendment in parliament today.
We do expect significant currency volatility this week. Just in the past few weeks we’ve seen swings of 5 to 8% in both the GBP/EUR and GBP/USD, and this could be just the precursor to much larger changes as the dust settles later this week. Any deal is likely to be positive for the pound in the short term, and if we pass certain benchmarks the pound could motor ahead like Ross Moriarty breaking free of the pack for Wales in the rugby on Sunday. Then again a failure to get the deal could see it fall back to the summer’s low levels.
This makes budgeting for a major transaction across borders, such as a property abroad, or your retirement, incredibly difficult. It is why we recommend locking in today’s very good rate with a forward contract. Our traders are ready to talk to you on 020 7898 0541 to lock in your rate as it increases this evening potentially.
Do stay in touch!
