Is it just BREXIT that will influence the Pound?
Of course the up and coming vote for the UK to stay in Europe or leave is now becoming a major talking point and major influence on the exchange rate.
Last week we saw STG/EUR rise back to the 1.30 level purely on an opinion poll that gave a 55-45 vote in favour of staying in. The rise was quite quick but it highlighted our view from last week that it really depends where the level of the Pound is when the result comes out.
The European single currency had a torrid week having traded close to $1.14 against the US dollar at one point, only to drop back down below recent support levels of $1.12. The move lower was in fact more to do with changing investor sentiment back in favour of a stronger US dollar, rather than any compelling negative changes to the Eurozone economic wellbeing.
Europe’s international trade in goods did report a surplus of €28.6billion for March 2016, with exports to the rest of the world totalling €177billion, down 3% on the same month a year ago. However, imports fell by a larger amount – down 8% – meaning the surplus was healthy.
MYTH 1 - Immigration - Restricting Migrants from the EU will lead to better prospects for UK workers.
Although there are manifold socio-political contentions,it is difficult to conclude that the UK economy has not benefited from the increase in immigrant labour from Europe (immigration from outside the EU is another matter). Most immigrants are working age and relatively well-educated, offsetting the negative effects of the country’s own ageing population. However, public services may come under pressure if migrant workers stop returning to their native countries upon retirement.
We have all read in the press recently about the demise of BHS, but the most worrying part of the story is how this will impact UK taxpayers and BHS pensions.
UK taxpayers will have to cover the statutory redundancy pay of the company’s 11,000 staff. Based on previous failures, such as Comet, City experts believe the bill will top £40million.
At the same time, every worker in the UK who is a member of a company pension scheme will have to help fill a black hole estimated at £571million in the BHS pension scheme. This is because the Pension Protection Fund, which steps in when businesses collapse, gets its money through a levy imposed on all company schemes.
The Euro has given up some of its recent gains against both the pound and the US dollar over the course of the week. Both currency pairs have seen very little volatility with the price ranges contained within one and a half cents.
The week started off reasonably positive for the Eurozone with Germany’s manufacturers reporting uplift in new order activity, up 1.9% in March from the month before.
400 years of Shakespeare and we are still pondering over the question!
I recently returned from London, more specifically the City of London, and was rather perplexed to find out that the financial sages were still in a state of flux, arguing over the theoretical economical fall out, on the day after of the fast approaching “In or Out” referendum.
Every year, thousands of Britons buy or sell properties overseas. Whether it’s the realisation of a long-held dream to own a place in the sun, or selling up abroad to move back to the United Kingdom, you will need to move large sums of money between different countries and currencies.
But while you might bag a bargain property or use your best negotiating skills to get a good sale price, you may not give much thought to what kind of deal you’ll get when you actually transfer money to pay for the property.
On Thursday 23rd June, there will be a referendum on whether the UK should remain in the European Union (EU). A referendum within two years was promised by David Cameron in the Conservative Party's manifesto for last year's general election.