GBP rocked once more as the prospect of a No Deal Brexit increases once again…
Sterling found itself at fresh lows against the USD this morning following Boris Johnson’s statement last night meaning ongoing political uncertainty continues to weigh heavily on the Pound.
GBPUSD fell to its lowest level since October 2016 as a result of Boris considering an early General Election and MP’s mulling a vote to block a No Deal Brexit this week. On top of this, rumours persist that MP’s are considering pushing for a 3-month extension to the already severely delayed Brexit date. Now, with the prospect of a No Deal Brexit becoming increasingly likely, what chance does the Pound have of staging a recovery against its major counterparts?
To highlight the last three months performance against the USD, this morning the pair hit 1.1958 having been at 1.3150 just 3 months ago. That is an approximate 10% drop equating to around £10,000.00 worth of currency less than if you had fixed your rate in June when selling £100,000.00 to buy USD. If the currency were to perform in a similar manner over the next three months we could see rates as low as 1.07…. Could you or your business afford another 10% drop in rates? How would this affect your cash flow and have you forecasted ahead to understand how this would affect paying your suppliers?
As political infighting intensifies and the jockeying for public adoration (or perhaps just acceptance) increases, the sustained pressure that the UK economy has been under for so long looks to be far from over. It could be argued that sitting back and waiting to see what happens is not necessarily the wisest of moves as further uncertainty is likely to increase levels of volatility moving forward.
There are of course two sides to every story, and should Boris somehow pull a rabbit out of the hat and get some sort of result out of the EU discussions, the Pound could of course rally. It seems though that with time running out, the chances of this happening are slim, and the Pound may continue to be backed into a corner.
There are a number of ways you can secure currency and alleviate the pressure on your currency transactions in the coming weeks. If you would like to discuss your choices or just want to get a rate, please call the dealing team on +44 (0) 1491 577550 and we’ll be happy to help.