The pound starts the week two cents higher against the euro than last Monday and a cent higher against the US dollar. In the context of the past four months that’s the classic example of a ‘dead cat bounce’. Good news all the same if you’re changing money this week.
The evidence of early trading today is that the markets are alarmed by the Operation Yellowhammer leaks in the newspapers yesterday, but only a bit. Operation Yellowhammer is the British government’s planning for a no-deal Brexit, which painted a worrying picture of a hostile EU sticking to the rules governing “third country” states from 31 October, including rigorous customs checks that could affect fresh food and medicine deliveries.
Will analysts believe the government’s assurances that the leaked document is a worst-case scenario, already mitigated against? The Chancellor of the Exchequer Sajid Javid has recently pledged another £2.1billion in cash to keep things moving. You do wonder what they’re going to spend it all on – tarmac for lorry parks? Freight aircraft on standby? Refrigerators? At least someone will be getting rich from all this.
The pound’s modest recovery could be the opportunity to lock in your rate if you have a trade coming up in the next year, with a forward contract. We don’t know much, but we can probably assume that things are going to get sticky in the next few months.
We also know that prices of property in our favourite European hotspots are likely to be chilled by worries over Brexit, even though property is not an EU matter and your right to own property will not be affected. So if you’re looking for a holiday home, this could be the time, so long as your currency is protected during the buying process.
Call your trader on 020 7898 0541 to see how you do that.
