Currency update from Currencies Direct - Costa Del Sol

  • Pound could fall as Brexit vote looms

    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 couple of weeks…

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    Thin trade and the absence of any notable Brexit developments helped the pound to strike slightly higher in late December, before stalling again at the beginning of 2019.

    This saw GBP/EUR trade between 1.10 and 1.11, while EUR/GBP held at around 0.90.

    Meanwhile, GBP/USD climbed from 1.25 to as high as 1.28 before falling back at the start of 2019, while EUR/USD pushed from 1.13 to 1.14.

    What’s been happening?

    The pound drifted higher at the very end of 2018, with a lull in negative Brexit headlines allowing the currency to exploit the weakness in some of its peers, although this failed to carry over into the start of 2019.

    The euro faced some setbacks in the latter half of December, meanwhile, with the Eurozone’s latest PMI revealing growth in the bloc’s private sector struck a four-year low in December.

    At the same time the US dollar has softened in the last couple weeks of December as a US government shutdown spooked USD investors.

    What do you need to look out for?

    After being delayed back in December, a parliamentary vote on Theresa May’s Brexit deal is scheduled to finally take place on 15 January and is sure to prompt some significant volatility in the pound if the deal is rejected, as many observers predict.

    Meanwhile EUR exchange rates are also likely to be impacted by the outcome of the upcoming Brexit vote, although likely to a lesser extent than Sterling.

    Finally, fears of a slowdown in global growth helped the US dollar get off to a strong start in 2019, a trend that may persist if evidence of an economic downturn continues to build.

     

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