GBP at a 6-month low – where does it go from here?
The pound has been in a near constant state of flux throughout June. In the last week alone it dipped following pressure from expectations of a no-deal Brexit and the commotion surrounding the Tory leadership race but gained ground against the US Dollar – which had weakened over uncertainty around the G20 summit. If you are preparing to make that once in a lifetime purchase or have regular FX payments, you may want to contact your SATFX account manager to take some of your risk (and stress!) off the table. There are many ways to do this; from a simple buy now pay now Spot contract, buy now pay later Forward contract or by placing a Market Order to target a specific price. We have the tools to help you manage your bottom line and to save you money in these turbulent times.
Let’s look at the top factors causing this swing:
- 1.Conservative Leadership Race
Throughout June the hustling for the conservative leadership has, of course, influenced the position of the Pound. Sterling seems to be reacting to Boris’ conflicting comments regarding his approach to a no-deal Brexit. He has said that the odds of a no-deal Brexit are a “million-to-one against” and “vanishingly small.” This seems to contradict with his “do or die” remark, and as such, it has led to a choppy end to the month for the Pound seemingly in a state of flux with the Euro and the USD.
- 2.Expectations of a no-deal Brexit
The prospect of a no-deal Brexit continues to weigh on the Pound, leading to a 6-month low (the below chart shows GBP movement from 24/06/2018-24/06/2019.):
- 3.G20 summit
On the run-up to the G20 summit on the 28th of June in Japan, the Dollar weakened due to the ‘tentative truce’ between China and the US. The Euro was also on the back foot as business confidence figures dropped to their lowest levels since 2014. Both of these events provided a brief respite for the Pound.
Moving forward, GBP’s performance will undoubtedly continue to be dominated by the ongoing Brexit discussions, with the Tory leadership race playing able assistant to the European exit main act.
If you want to discuss your currency requirements with a friendly, knowledgeable team, and for more information and support on how to save time and money on your future transactions call SATFX today: +44 (0) 1491 577 550.