Theresa May Brexit Speech – British Pound Surges

January 17th: Brexit Statement

Theresa May’s speech was a clear attempt to placate residual market fears and calm GBP volatility with her starting point of working for ‘Global UK’.

Morning mid-market rates – The majors
48-GBP GBP > EUR 45-EUR = 1.1535 – (up 1.6%)
48-GBP GBP > USD 147-USD = 1.2330 – (up 1.7%)
48-GBP GBP > ILS 62-ILS = 4.7032 – (up 2.15%)
The market wanted a little more detail around plans for a ‘clean’ Brexit (formally known as ‘hard’ Brexit before the spin doctors softened the messaging) and any further detail on trading agreements might be in the pipeline, with the EU and other counter-parties. She decided not to disclose any further detail here, satisfied that the Trump’s assertion that Britain will be at the front of the queue for free trade deal, saying he’s keen to see a ‘signature ready’ agreement soon after he’s sworn in, will have provided enough strength to her hand for the time-being.

The main point of contention, which has driven much of the GBP volatile because of the wide-reacting implications, has been the stated need for free movement within the EU, in order to preserve access to the single market. PM needed to use this opportunity to clarify her position and provide more detail on the direction and end-game that she is pursuing. She ruled out single market access, so we assume that the she sees control over free movement as a priority. Instead, trade will be accessed via a customs agreement with the EU, removing as many barriers to trade as possible, and she suggested that she is open to negotiating certain payments for this access.

The final decision will be put to a parliamentary vote, which will have been taken as positive ground to cede for the remain voters.

To take advantage of the movements we’ve seen so far, why not log in and get an international money transfer quote? But if you think the market has further to run, why not set up a rate alert?

Got a question? We’d be delighted to help!

Paul Plewman

Paul Plewman
Director of Sales & Operations
t: +44 (0) 20 7096 1036