You are receiving this pop-up because this is the first time you are visiting our site. If you keep getting this message, please enable cookies in your browser.
You are using software which is blocking our advertisements (adblocker).
As we provide the news for free, we are relying on revenues from our banners. So please disable your adblocker and reload the page to continue using this site. Thanks!
You are receiving this pop-up because this is the first time you are visiting our site. If you keep getting this message, please enable cookies in your browser.
Laurens Maartens, NBWM:
"Brexit reports misleading world of currency"
Right when the Brexit talks threaten to run aground, the EU and Great Britain are taking a step towards one another. It's far too early, however, to presume both parties will soon come to an agreement, according to Laurens Maartens of the Dutch Betaal- en Wisselmaatschappij.
Will there be an agreement on Brexit this fall? A few days ago it seemed as though the negotiations between Great Britain and the EU were in a head lock. On Tuesday financial news agency Reuters reported that the deadline for reaching an agreement had been moved back from mid October to November. Initially both parties were to agree by June. Due to the delay it was feared that an agreement would not be reached by Brexit Day on March 29 2019. If this is the case there will be chaos. From one day to another it will be a lot more difficult to get goods across the border. Some parties are already warning there could be a shortage of medicines on the island. Even if both parties work it out at the last minute, it's possible that there won't be enough time to carry out all of the measures. On the currency market the increasing risk of a so-called No-Deal has lead to a decrease in the pound to below €1.10. This is the lowest level in almost a year.
Mood is turning
Half way through the week, however, the mood turned. This was largely thanks to the promise by EU negotiator Michel Barnier that he will make an offer of collaboration to Great Britain that the EU hasn't offered to any other country. At least as important as the statement itself was the company in which Barnier spoke. He gave a statement with the German minister of Foreign Affairs, Heiko Maas, which indicates that he is covered by German politics. The support from the strongest economy in Europe is necessary for reaching an agreement between the EU and Great Britain. A second reason for the quick revival of the pound is the statement by Brexit minister Danial Raab that they have already agreed on over 80% of the issues. He did not mention which issues these were. It's important that both sides find a solution for the border between Ireland and the British Northern Ireland. At the end of last year Prime Minister Theresa May guaranteed that the movement of goods and people will remain possible there. She had to backpaddle on the statement, however, under pressure from Conservative party members. European negotiators maintain that finding a solution for the Northern Irish border is a condition to reaching a Brexit deal. It is too early to feel any enthusiasm for the prospects of the pound. In the past year it has happened more than once that the talks ran aground after a few optimistic comments. For now the currency will continue to bounce up and down between hope and fear. As long as there is no agreement, it is up to entrepreneurs to put in place a plan B for a No-Deal and to map out how the currency risks can be covered - including after Brexit Day March 29 2019.
Laurens Maartens ([email protected]) is a currency expert at the Nederlandsche Betaal & Wisselmaatschappij (www.nbwm.nl). He started his career in 1998 at the Swiss bank UBS. Since then he has worked at various parties at home and abroad. He comments on current currency developments in newspapers, on websites and on the radio. In addition, he provides lectures and training for entrepreneurs in the field of currency management. In doing so, he stresses to the participants that they should mainly choose simple and cheap currency products. This column reflects his personal opinion. This information is not intended as professional investment advice or as a recommendation to make certain investments via the Nederlandsche Betaal & Wisselmaatschappij NV.