You've landed on our UK website.
Click here to visit our USA website.

If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

GBP climbs as Brexit outlook brightens

currency-newsGBP climbs as Brexit outlook brightens
Sterling sentiment appeared to improve markedly on Thursday as investors become increasingly optimistic in their outlook towards Brexit amid reports that the EU is warming to the idea of a softer exit for the UK.

The pound appears to be consolidating Thursday’s gains this morning. GBP/EUR, GBP/AUD, GBP/NZD are all trending narrowly at €1.1356, AU$1.7343 and NZ$1.9046 respectively, meanwhile GBP/USD continues to climb today, rising 0.34% to US$1.3940 while GBP/CAD is up 0.27% at CA$1.7289.  

Read on to find out why GBP/USD is close to striking its best levels since the Brexit referendum…

What’s been happening?

Despite a lack of political and economic developments on Thursday the pound was still able to push higher as investors turned their attention to the currency’s long-term outlook.

Markets appear to have become a little more upbeat about Sterling’s prospects in recent days, especially in regards to Brexit.

With both Spain and the Netherlands hinting last week that they would support the UK remaining closely aligned with the EU in terms of trade, and Jean-Claude Juncker suggesting that Britain could rejoin the EU after Brexit.

Investors are also hopeful that positive progress in talks will help to clear up some of the uncertainty surrounding Brexit. In addition to reassuring markets this may also facilitate another rate hike from the Bank of England (BoE) this year.

At the same time, hints that the UK and EU are close to an agreement over a transition period are lifting the pound on hopes this will help to avoid a ‘cliff-edge’ Brexit next year.

Finally the economic outlook is also looking a little brighter for the UK, with markets hopeful that Britain’s growth will continue to perform robustly in 2018.

The pound performed particularly well against the US dollar yesterday as it climbed back above $1.39, close to striking its highest levels since the Brexit referendum.

The uptick was in part thanks to the broad-based sell-off in USD, with markets remaining overly sensitive to any downside risks to the US currency.   

Meanwhile the euro showed a little more reliance against Sterling on Thursday, following some positive comments from the European Central Bank’s (ECB) Benoît Cœuré, although it left GBP/EUR still advanced enough to strike a new one-month high.

What’s coming up?

With the remainder of the UK’s data calendar this week looking empty GBP investors are likely to turn their attention to next week’s employment figures.

Markets are likely to pay close attention to November’s wage growth figures when they are released on Wednesday amid concerns that a persistent gap between wages and inflation is dragging on the British economy.

It’s set to be a quiet day for Eurozone data today, although the euro could still see some movement if ECB speculation continues to run rampant, as it did earlier in the week.

The US will publish its latest consumer sentiment index this afternoon, which could lead to a rebound in the US dollar if confidence strengthens as expected.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.