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Pound/Euro 2019

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Jimbo:
Sterling is still declining. TravelFX this morning is 1.1258

IMX daily newsletter says:

--- Quote ---The currency has weakened by around 3 percent since the start of this month against both USD and Euro. Markets are pricing in a real possibility that a deal will not be agreed before the withdrawal agreement therefore increasing the chances of the UK leaving the EU without a deal.
--- End quote ---

Dupnica:
 Wish I'd bought some weeks ago when the rate was 1.162.

Jimbo:
So do I. The rate dropped a bit more because MPs are not rushing to endorse Theresa May's latest (and probably last) attempt to get her deal through parliament.

I don't see much hope of a significant strengthening of the pound over the summer. There isn't currently anywhere left to go.

My personal comment on this (I stress only my view, plus 99% of economists) is that our current likely track to a No Deal Brexit would not create certainty; on the contrary, No Deal means many years of uncertainty and vast negotiations. There are few or no countries which trade under WTO rules - they all have "deals," many which have taken a decade to agree.

The weak pound has implications for the resort. The lower the pound the fewer euros those of us who do not have unlimited budgets will spend. We have to consider not having lunch in a beach-side bar/taverna and instead take boiled eggs and fruit to the beach. Of course, the difference between 1.12 and 1.16 is just a few cents - the significant change would only be a return to values such as 1.3. I can think of scenarios which would lead to this, but I dare not mention them!

Tredegar Boy:
Well Jimbo unless parliament gets its act together in some shape or form we will leave the EU without a deal as the default position at the end of October. And as its parliament which has got us into this mess along with the incompetent PM its they who will take the blame. We're unlikely to get an extension. Macron is 100% against that and why would they agree when the situation has got worse since the last extension.

A no deal will without doubt be problematic in the short-term but with 44% of our exports (£244 billion) going to the EU and 53% of our imports (£341 billion) coming from the EU the desire to get an agreement albeit temporary would be great on both sides.

Jimbo:
I won't speculate on outcomes or blames here, but the currency markets are clearly not impressed. The pound fell again. The Interbank Rate (what you'll get on your credit card) as I write is 1.13196 and the TravelFX cash rate is 1.1206. It was below 1.2 earlier.

There's not much on the horizon that will make much difference for this summer!

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