So, it came down to a Brexit election in the end, as votes for what have historically been Labour seats turned to the Conservatives, surprising even some of the most seasoned Tory MPs.
What will the UK Government do now?
The Conservative government under existing Prime Minister, Boris Johnson, will need to be reshaped to make the most of the wave of support the party has received in the election. This is perceived to be because their stance on Brexit at least offers some certainty about deadlines and when Brexit will happen. What will happen when Brexit becomes official is another matter for considerable debate and discussion and will continue to play out in the weeks leading up to the deadline of 31st January.
What happens next with Brexit?
Work will undoubtedly start straightaway to get approval for the current Brexit deal and to prepare for the UK exiting the EU on 31st January. And then the battle commences to get the existing deal approved, to leave the EU at the end of January. There is an awful lot of work to be done to seal trade deals and carve out a new relationship with the EU.
There are still a number of unknowns and sources of contention in the negotiations and planning ahead, so there will still be numerous pressures for the Pound. If you are exchanging Sterling in the days and weeks up to the end of this year and indeed in the run up to the Brexit deadline at the end of January 2020, we can help you navigate the choppy waters now and in the future. Get in touch to see how we can support you.
You may also find interesting:
- Sterling boosted by historic Conservatives win
- How will the outcomes of the election affect currencies?
- Sterling steady as polls open
What will happen to the Pound?
Currency markets are volatile currently for a number of geopolitical reasons, mostly relating to trade relationships. Brexit developments will keep Sterling on its toes. The exit poll declaring a predicted Conservative win by a large majority pushed the Pound up by 2% in mere minutes last night, rising from 1.31 to 1.35 versus the US Dollar and from 1.18 to 1.20 against the Euro. Markets took this as a sign of some light at the end of a 42 month long Brexit tunnel for UK businesses, offering some illumination and perhaps a clearer way to press forward.
Sterling subsequently slipped a little as markets responded to the spike by taking profit on the moves, but there is room for Sterling to strengthen further if investors like what they’re hearing about Brexit developments. If a firm agreement can be reached with the EU, Sterling should soar against a swathe of other currencies. We are already hearing that EU negotiators are pleased with the result as it means they can negotiate with a UK leaders who can deliver on decisions made. Mind you, nothing is guaranteed in the current economic and political climate, so we certainly won’t be resting on our laurels. Be prepared and keep a close eye on Sterling against its key currency partners as developments unfold – we’ll keep you updated when anything exciting happens!