UK farm payments set to add to currency volatility

Sterling and euro currency volatility may steepen this week when UK farmers fix their EU farm subsidy payments in pounds, predicts one leading analyst.

Bloomberg strategist Vassilis Karamanis says that for UK farmers who opt to get their payment in pounds, the exchange rate used will be the European Central Bank fixing rate on the last trading day of September.

Each year, a single bank wins the mandate to convert the full sum of farm subsidies, which totalled €3.3bn for the financial year 2013.