May makes expat offer in Brussels, GBP exchange rates rally

GBP/EUR climbed from €1.1331 to €1.1398, GBP/USD rallied from $1.2655 to $1.2737, GBP/AUD achieved a high of AU$1.6830 and GBP/NZD advanced to NZ$1.7494.

Will there be more currency movement before the weekend? Keep scrolling to find out…

What’s been happening?

With inspiring economic data lacking on Thursday, the latest Brexit developments took centre stage.

Given the Conservative Party’s less-than-spectacular performance in the recent general election, PM Theresa May would be forgiven for feeling slightly unenthused about attending an EU summit dinner in Brussels last night.

However, the PM used the occasion to announce that three million EU nationals living legally in the UK will be allowed to stay in the country after Brexit as long as the same rights are afforded to one million UK citizens living in European countries.

May called the deal a ‘generous offer’ and stated; ‘The UK's position represents a fair and serious offer, one aimed at giving as much certainty as possible to citizens who have settled in the UK, building careers and lives and contributing so much to our society.’

European leaders took note of Mrs May’s offer, with German Chancellor Angela Merkel dubbing it ‘a good start’.

Meanwhile, European Council President Donald Tusk caused something of a stir before the summit dinner by insinuating that the UK still has the option to remain in the EU. Tusk channelled the late, great John Lennon when he stated; ‘You may say I'm a dreamer, but I'm not the only one.’

The pound rallied against all its major peers as the European markets opened.

What's coming up?

Influential UK news is rather thin on the ground next week.

Of the limited number of reports scheduled for release the only ones to really focus on are the BBA loans for house purchase number, Nationwide house price figures and the UK’s final first quarter growth data.

Any results which support the argument that the UK economy is slowing would be pound-negative.

Elsewhere we’ve got German and Eurozone inflation figures and the US durable goods orders, consumer confidence and GDP ecostats.

Of course, the UK’s first tentative steps on the path to Brexit will also be responsible for GBP fluctuations, as will any developments in the ongoing discussions between the Conservatives and the Democratic Unionist Party (DUP).

We’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.

Phil McHugh,
Trading Floor Manager

Phil provides dealing and hedging services whilst also helping to manage Currencies Direct overall market exposure.