On the one hand, it could cause the Pound to fall. Indeed overnight the GBP/EUR rate fell into the €1.14's but has since recovered back to about €1.15 this morning. On the other hand now that the process of leaving the EU has begun, the Pound may well bounce back and end the week higher. There really is no way to know what effect today will have on the markets, but I do expect some volatility.
I think most fluctuations will come from 2 key speeches we'll hear today. Theresa May will make a statement to parliament and if there are any hints here as to the direction negotiations will take, it could affect Sterling. Donald Tusk the president of the European Council will also make a speech at 14:45pm, and again if any negotiating positions are laid out, expect market movement. This is the shape of things to come, as information is made available that indicates which way negotiations will go, and so it's likely an extremely volatile period lies ahead.
Fix a rate now or wait?
If you need to exchange currency you need to consider what to do. Those less risk averse may want to hang on and see what happens to rates in the coming weeks and months. You may end up with a better or worse rate than is currently available, but it is a gamble. Those that don't want to take any risks can freeze the current exchange rate for up to 2 years. This protects you against the rate moving the wrong way, but also manes you're unable to take advantage of a rise in the exchange rate.
What you should do depends on your timescales, and attitude to risk, and what is right for one person might not be for another. We can help any clients that need to move a large volume of funds and we trade over 35 major currencies in both directions. Our rates are extremely competitive so you could save thousands by getting in touch for a quote. In additional to exceptional exchange rates we offer guidance on what is moving the rate to help you to decide when to buy. We also have a variety of contract types to protect against the market moving against you.
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