Are you a Brit, thinking of transferring money to France or Spain in the foreseeable future, to emigrate or buy a holiday home? Alternatively, are you a European citizen intent on moving to Great Britain, and to transfer money to the UK, to facilitate your move?
If so, you may have been following the UK's Brexit negotiations, and noticed that the talks frequently influence the foreign exchange rate.
In particular, you might have heard mention of a man called Michel Barnier, and noticed that, when he speaks, it tends to affect the value of sterling versus the euro.
So who is Michel Barnier, what is his role in Brexit, and how has Mr. Barnier affected the exchange rate? Well, keep reading, for an explanation of Mr. Barnier's role in Brexit and his influence on sterling.
Who Is Michel Barnier?
Michel Barnier is the European Union's (EU) Chief Brexit Negotiator. Mr. Barnier was appointed to the role on July 27th 2016, a little over a month after the UK's referendum to exit the EU, by the President of the European Commission (EC), Jean-Claude Juncker.
At the time, Mr. Juncker said that he appointed Mr. Barnier because "I wanted an experienced politician for this difficult job."
Prior to Mr. Barnier's appointment as the EU's Chief Brexit Negotiator, he held a number of senior roles both within the French government, and the EU.
For example, Mr. Barnier was France's Minister of Foreign Affairs from 2004 to 2005, France's Minister of Agriculture and Fisheries in 2007 to 2009, and the European Commissioner for Internal Market and Services from 2010 to 2014.
How Has Michel Barnier Influenced Brexit?
Mr. Barnier has been responsible for negotiating Brexit with UK prime minister Theresa May's government, since Mrs. May triggered the Article 50' negotiating window. As such, Mr. Barnier has defended the EU's interests during the Brexit talks.
For example, Mr. Barnier has argued that, if the UK wants to retain access to the EU's Single Market after Brexit, the UK must continue to accept Freedom of Movement of people. These are 2 of the EU’s 4 “indivisible freedoms”.
Some of Mr. Barnier's interventions in the Brexit talks have been very influential. For example, the UK has frequently tried to renegotiate the draft 'backstop', in which Northern Ireland would remain part of the EU's Customs Union after Brexit, to ensure there's an invisible border in Ireland.
However, speaking to France's RTL radio on January 30th, Mr. Barnier insisted that the backstop is "part and parcel" of the draft Brexit deal.
How Has Michel Barnier Affected The Pound?
Michel Barnier has tended to affect the pound in 2 ways. First, when Mr. Barnier has suggested that a Brexit deal looks nearer, the value of sterling has often risen. For example, on September 11th 2018, Mr. Barnier said that a Brexit deal looked possible "within the next 8 weeks".
That day, the pound to euro interbank exchange rate rose by +0.28% to 1.1626, while the sterling to US dollar interbank exchange gained by +0.4% to 1.3073. In fact, The Independent newspaper even called Mr. Barnier "the pound whisperer", so clear was Mr Barnier's influence over the value of the pound.
That said, when Mr. Barnier's comments have made a Brexit deal look further away, sterling has often weakened.
For example, on March 19th, the EU's Chief Brexit Negotiator said that, were the Article 50 negotiating window to be extended, this must serve a clear purpose. This put pressure on the UK government to explain why it wanted to extend Article 50.
That day, sterling fell by -0.49% versus the euro to 1.1647, and by -0.37% against the US dollar to 1.3245.
So to sum up, you now know who is Michel Barnier, his role in the Brexit talks, and how his interventions have tended to affect the exchange rate. This may be helpful for you, for when you transfer money abroad in the near future!
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Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email email@example.com.