Brexit progress so far
The Pound has been performing slightly better of late as the outlook for the final outcome from the Brexit deal improves. According to most reports, a Brexit deal is all but agreed to allow the UK to move to the all-important second phase of the Brexit negotiations. Personally, I think much of the good will that is currently being extended to the Pound in anticipation of a deal being agreed, could easily be undone. I would not be surprised to see the market turn on the Pound in its current assessment of the relative strength and weakness of the currency.
The EU summit starts tomorrow and could run on into the weekend. Most analysts foresee some form of agreement but there is a real danger that the Pound could actually lose serious ground if a deal is not reached. Whilst picking through the most up to date information that we have concerning this situation, it is difficult to be overly optimistic about where exchange rates will go for Sterling. The bounce that we saw very recently on Friday could actually have been a high that might not be reached should market enthusiasm not reach this level again.
The outlook for future Brexit progress
I would not be surprised to see Sterling retest those more recent highs considering the good news. There is however a real danger when one considers the overall position on Brexit, and noting the fact that we are still very far away from some form of agreement, that we will ultimately have to wait quite some time to see the Pound really performing well and starting to undo much of the uncertainty placed over it since the Referendum vote in 2016. Nevertheless, the general mood is more optimistic and this should be carefully considered for any clients looking to make a currency transfer soon or in the New Year.