Riding the sterling rollercoaster

Sterling’s recent rollercoaster ride is leading the currency into uncharted territory, with the behaviour of the pound more akin to an emerging market currency than the “safety play” that a reserve currency should normally represent


Bank notes as paper planes

Foreign exchange markets have been exhibiting symptoms of denial since June’s shock Brexit referendum, perhaps hoping that “soft” Brexit still remained an option – hopes that were firmly squashed by prime minister Theresa May at the Conservative Party conference.

The market’s reaction was swift and brutal – witness sterling’s “flash crash” in Asia in the early hours of October 7. The reason for the sharp fall is not yet understood, but speculation surrounds the reaction to Mrs May’s comments or even the computer algorithms that factor the “animal spirits” circulating on social media into their trading decisions.

With clients spanning large, medium and small businesses, we are working harder than ever to obtain the very best rates for our customers. We quote close to the market ensuring that our rates are always competitive and if there is an exchange rate that a client is looking for – an “at best order” – we can arrange for that order to be automatically placed when that rate is breached. It was a strategy that paid off handsomely for many clients when we bought sterling on their behalf in the four short minutes during which the pound plunged to an unprecedented 31-year low during the recent flash crash.

With volatility for the euro and sterling certain to continue in the face of ongoing uncertainty coupled with thin liquidity, demand is growing for forward contracts for up to a year. Our clients need to know they can operate hedging strategies and we also operate a market watch where we watch the markets for specified rates between 8.30am and 5.30pm, Monday to Friday, with no obligation. We contact the client when the desired level is available to give them the necessary flexibility they need in a fast-changing forex environment.

Whether the transaction is large or small, companies with foreign exchange exposure demand knowledgeable guidance, free transfers and a competitive pricing structure. Whether a large institutional client, a private client or any size corporate client, we offer an identical, high-quality service, whatever the size of transfer.

Partner with one of the most respected names in the foreign exchange industry to negotiate the stormy waters ahead

We have seen an increase in the demand for sterling at lower levels as loss of confidence in the pound reflects resignation that Brexit means “hard” Brexit, with no amount of wishful thinking altering the fact.  The euro is similarly subject to uncertainty over policy outlook, economic outlook and political outlook, with elections looming throughout Europe. Markets overall appear more fragile and skittish.

We invest heavily in technology so that our trading platforms can keep pace with the latest moves and deliver its benefits to our clients. Most major currency transfers take place on the same day, on receipt of client funds before 12pm. All funds are internally segregated and held securely within a client account at one of our banking providers in line with Financial Conduct Authority requirements.

We are able to offer a proactive, individual service to our clients. To discuss any content in more detail an experienced team of analysts are on hand to answer your questions. Dedicated and experienced foreign exchange consultants are available to guide and assist you in every aspect of your foreign currency requirements, including strategic forward planning and monitoring for favourable currency opportunities to secure the very best exchange rates.

Sterling’s ride is likely to continue bumpy while it is being battered by UK politics, but some commentators are already forecasting a rebound. Partner with one of the most respected names in the foreign exchange industry to negotiate the stormy waters ahead.

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