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Brexit Bill Resigned to the Pages of History – How did the Pound React? (Matthew Vassallo)
The UK government finally triggering Article 50 of the Lisbon treaty yesterday, which officially started our separation from the EU.
We have now passed the point of no return and yesterday’s events have been resigned to the history books and no doubt will be discussed by economists and politicians for years to come.
The UK is the first country to leave the EU and it is now over to the government to negotiate the terms of our departure over the next two years.
Many clients holding Sterling had been waiting for yesterday’s events to unfold before committing to a currency exchange. The Pound actually found some support in the build-up to yesterday’s key political decision, as a level of uncertainty was removed.
It was a fairly volatile morning for the Pound having seen recent gains eliminated early on, before a recovery and an improvement against the EUR, USD & AUD by lunchtime. The Pound’s position was solidified during Prime Minister’s question time, with Theresa May reassuring the public that they would be working day and night to secure the best deal possible for the UK and hoped to keep “close ties” with our European neighbours, in terms of trade and security.
Whilst only time will tell whether this is the case or not, her bullish tone coupled with the Brexit bill finally being triggered, seems to have brought some confidence back to the market and this could help stabilise and even boost the Pound’s value further over the coming days.
Personally, I am still wary about gambling on massive improvements for the Sterling over the coming weeks and months. Despite the recent upturn and yesterday’s positive movement, there are still many unanswered questions.
For example what deal will be in place for the UK as we negotiate our exit, what potential fines need to be paid and what vision does the government have for the long-term future of the UK economy?
Whilst Theresa May made it clear that the sanctuary of UK citizens in Europe and EU nationals here in the UK was of the upmost priority, we still have no confirmation of what fine the UK will be paying to exit and as such the Pound is still liable to some negative movement in my opinion.
The question clients holding Sterling need to ask themselves is are they prepared to risk losing the gains they’ve made over recent days and is the long-term economic prosperity of the UK economy yet secured?
Whilst these type of questions remain unanswered I am still of the opinion that clients should be looking to take advantage of short-term market spikes, rather than hold out for long-term sustainable gains.
Whilst talk of Brexit has been driving market sentiment for some time, we also need to consider that the Pound’s recent upturn has been supported by better than expected economic data.
Last week’s Retail Sales figures were a prime example of this and with UK Gross Domestic Product (GDP) figures released on Friday, could we see further improvements for Sterling? Any figure above the 0.7% growth expected will more than likely push Sterling’s value up, so any clients with a GBP requirement should be keeping a very close eye on market developments over the coming days.
If you have an upcoming Sterling currency transfer to make, then we can help you navigate this turbulent market by keeping clients up to speed with all the latest market developments following yesterday’s historic events.
If you would like us to monitor the market for you ahead of a currency exchange, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on 0044 1494 787 478 and ask one of the team for Matt.
Alternatively, I can be emailed directly on [email protected].
Source: http://www.poundsterlingforecast.com/2017/03/30/brexit-bill-resigned-to-the-pages-of-history-how-did-the-pound-react-matthew-vassallo/
Frankly speaking, I don’t think there is any major reaction at all; it will be interesting how things work up as we reach ahead. We just need to make sure we trade with proper way and method and follow the trend. I always stick with long term approach, it’s pretty easy under OctaFX given they got lovely structure with having Islamic Account (swap free), it really helps a lot and one can go for long term trades with confidence in any situation.