Early weak positivity – an imminent deal!

This week on the currency markets has been dominated by developments from the Brexit negotiations, with a potential deal on the first round of issues seemingly quite close to an agreement.

On Monday we saw a groundswell of excitement, with Theresa May and her team in Brussels, and news headlines reporting that a deal would be done by the end of the day – the Pound soared and touched the best rates for six months against both the Euro and the Dollar. At lunchtime this was quelled, when the DUP leader Arlene Foster came out, in response to news reports of an agreement on the Irish border situation, with a firm riposte; stating the DUP’s unhappiness at the wording and hence her refusal to back the potential deal.

Everything off – DUP to the fore…

With the DUP holding up the Conservative government following Theresa May’s disastrous election earlier this year, it is believed they have an absolute veto on anything Northern Ireland related, and so the Brexit deal was off, various press conferences ensued and the Pound dropped a cent against the other majors.

Since then we have been playing a bit of a cat and mouse game, with negotiations ongoing behind closed doors, but no clear impression of how this key issue – the Irish border question – will be resolved.

Deal back on?

Today there are due to be more press conferences in Brussels and Theresa May and her team are thought to be heading over for more negotiations. With much talk of a critical phone call between Arlene Foster and the Prime Minister, could there have been some movement from the Dup or more likely further concessions from the PM, and could a deal be back on?

The ongoing support for the Pound – still just a cent below the early week highs – suggests the market is confident there is still good scope for a deal, but the Irish border question doesn’t seem to have an answer, with so many different stakeholders demanding their position be taken into account… Is it even possible a deal can be done?

With sources close to the talks suggesting it might be as bad as only a 50/50 chance, you need to consider what is best for your upcoming currency requirement. A cent below the best rates since June is a great position to be in when you consider that during that six-month period rates have been five cents lower than they are now – a difference of £8200 on a €200,000 purchase. Do you want to take a 50/50 gamble with your dream home overseas?

Here at Currency Index, we can help you to lock in your exchange rate even if you do not need your currency for some time to come, so get in touch with your account manager to discuss your options.