Pound climbs as Brexit sentiment rises

Currencies Direct

Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…

Latest currency news
The pound appeared to find its feet again at the end of April, drifting higher on the back of some positive UK economic data and improved Brexit sentiment.
This resulted in GBP/EUR jumping from €1.15 to €1.17, and pushed EUR/GBP back down to £0.85.
Meanwhile, GBP/USD has climbed from $1.29 to $1.31, whilst EUR/USD slipped from $1.12 to $1.11.

What’s been happening?
With Brexit likely delayed until October, there was room for the pound to be influenced by economic data again over the past couple of weeks, helping to prop up GBP exchange rates and allowing Sterling to strike multi-week highs as Brexit sentiment improved in late April.
Meanwhile, the euro has struggled over the last couple of weeks, with a stronger-than-expected Eurozone GDP reading in the first quarter failing to dampen wider concerns about the bloc.
Finally, sliding risk sentiment has meant the US dollar enjoyed strong support through to the end of April, but was forced to give up some ground at the start of May after US wage growth fell short of expectations.

What do you need to look out for?
Expect to see the pound become increasingly sensitive to political developments over the next couple of weeks, with the upcoming EU elections likely to be viewed as a proxy for a second referendum.
The EU elections are also likely to take their toll on the euro in the coming weeks as Eurosceptic parties threaten to make gains this year.
At the same time, the US dollar is likely to continue to enjoy broad support in the coming weeks, especially if a risk-off mood in markets continues to linger.

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