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Pound suffers stunning fall amidst increased Brexit risks

We have seen significant volatility in currency markets over the past couple of weeks, particularly in the pound as a result of heightened Brexit uncertainty. This has resulted in GBP/EUR sliding from 1.10 to 1.09, and propelled EUR/GBP to 0.91. Meanwhile, GBP/USD has collapsed below the 1.30 barrier to strike a low of 1.28, whilst EUR/USD has held firm at around 1.18.

What's been happening?

The pound crashed this month, plummeting to multi-month lows as Boris Johnson's Internal Market Bill threatens to jeopardise a post-Brexit trade deal with the EU. The euro, meanwhile, has struggled to sustain its gains in recent weeks as some lacklustre EUR data releases and Europe's coronavirus resurgence has weighed on the single currency. At the same time, the US dollar has moved further away from the two-year low struck at the start of September in response to fresh safe-haven demand.

What do you need to look out for?

Looking ahead, the threat of new coronavirus restrictions and increased risk of a no-deal Brexit are likely to see trade in the pound grow increasingly choppy in the coming weeks. The euro could also be volatile as European leaders may be forced to take more drastic action if they are to curtail the continent's coronavirus resurgence. With coronavirus back in the headlines, we could see the US dollar back in demand through the second half of September, although the looming threat of an extremely contentious presidential election could temper these gains.

At Currencies Direct, we're here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers. Since 1996, we've helped more than 325,000 customers with their currency transfers, just pop into your local Currencies Direct branch or give us a call to find out more.

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The Tenerife Property Guide is a great advocate of Currencies Direct, whose Canary Islands Manager, Carol Schleisman (based in Tenerife), and her team in Los Cristianos, provide a top-notch service to all clients.

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