UK Pound Steadies Amid Brexit Turmoil
Recent GBP trading has put the pound in a surprisingly stable position despite the fallout from a Brexit campaign in complete disarray. With in-fighting across Parliament and little sympathy from leaders in the European Union, the pound has found a level of confidence across the City where some have described a strange sense of calm, despite the extensions and uncertainty in Westminster.
The sterling rate has been volatile since the UK’s decision to leave the European Union in 2016. As many veteran traders have been warning Britain of the disastrous effect a no-deal exit could have on the economy, others believe Britain can flourish once unshackled from the EU.
Volume And Volatility
Despite dropping nearly 10% in 2016, the pound has slowly been clawing its way back up on the foreign exchange rate table and generally lingered around the figure of $1.31 to the dollar, a fairly positive figure considering the ever-changing outcome of the Brexit votes.
It comes as a brief piece of good news for a campaign that has not only divided the nation but earned scorn and criticism from across the globe, especially from the European Union, though this doesn’t spell stability for the future.
Many have acknowledged that leaving the European Union could destabilise the pound, with things getting worse if the UK crashes out of the union without a deal within the next few months. Polls show the chance of the UK remaining into the Union past 2020 – whether by another vote or an extension – at around 50%, unsurprising with the lack of cohesive planning coming from Westminster.
Mark Carney, the governor of the Bank of England, has spoken about his Brexit worry since before the vote even took place, and has said on multiple occasions that the UK leaving the union without a deal could spell disaster for British markets and the economy.
With an extension to October now agreed, the next round of volatility may come in the run up to the European elections (in May), with many in the UK government very keen to avoid having to take part – and therefore motivated to see a deal signed off before then.
Read More: Trading Forex
Trade Now: Find A Forex Broker