The most significant factor in dictating the Pound’s value is Brexit negotiations and considering how things sit at present it does not bode well for Sterling. David Davis, the UK Chief Negotiator and Michel Barnier the EU Chief Negotiator are currently at loggerheads.
The main reason for the Sterling weakening recently was due to comments from Michel Barnier who warned that a post-Brexit transitional deal is “not a given”. Barnier stated that the EU and the UK are struggling to agree on several points which are jeopardising the March deadline put in place to give much needed clarity to the public on the current state of negotiations.
The most significant points of contention are lifetime rights of residency to EU citizens who land on British shores following Brexit, but before 2021, and having to abide by new EU laws with the UK having to accept these laws with no power to negotiate.
Brexit speeches expected
Boris Johnson is due to speak to today and he is expected to attempt to quell fears surrounding Brexit and try to unite leavers and remainers. Personally I think this may be cause for concern, Boris has been know to cause controversy and in the past I have thought that he may be also a little too concerned with his own agenda. There have been rumours that the speeches have been screened by Downing street first so it may not cause any great shakes on the market.
Theresa May is due to talk over the weekend which could have more bearing on Sterling value if she gives any indication to Brexit plans.
What to expect when buying Euros with Pounds?
If you are involved in a Euro purchase, selling Sterling I would not have higher expectations of trading much further above 1.14. There have been very small windows of opportunity when the GBP/EUR exchange rate has breached 1.15, but it has quickly retracted on each occasion, it seems this is a resistant point at present.