How Will the Brexit Vote Affect GBP and USD Forex?

forexbrokerrebateprogram 2022/8/16 0:22:54 71Views

What will the Brexit vote mean for GBP and USD Forex? If you are planning to trade Sterling in the near future, you need to understand how the vote will impact the GBPUSD pair. A limited response from Sterling could mean the currency will weaken. However, there is a good chance that there will be some volatility in the GBPUSD. A prominent opposition party member recently said that it could be resolved with a mermaid riding a unicorn.

The currency traders would dump the pound and send their funds into the dollar if the U.K. votes to leave the European Union. The outcome of the referendum will determine whether or not the U.K. remains in the 28-nation trade bloc. Currently, opinion polls show a close race between the remain and leave camps. Market volatility is expected to spike once Brexit is finalized, as investors will be driven to cash as a result of uncertainty.

The pound has been floating freely on the currency markets since 1992. It is determined by traders who bid and sell. The currency acts as a safety valve for the economy. The global financial crisis has hit countries with weak currencies and a weak pound. Countries with strong currencies had to cut wages to get out of the crisis. This could have a negative impact on the U.S. economy.

A key factor in deciding when to trade EUR/USD and GBP/USD is timing. You should trade EUR/USD on the same day as the Brexit referendum. If you trade EUR/USD on the same day, you can expect the euro to fall and GBP to rise. But if you are trading GBP/USD, you should consider buying GBP/USD pairs after the referendum to ensure you don t miss the opportunity.

While the Brexit vote has caused some volatility in the GBPUSD, there are no strong fundamental reasons for traders to buy GBPUSD. While the interest rates of the two countries have historically been similar, the relative trade picture has been quite varied. In general, the currency with the larger current account deficit tends to be weaker. As a result, it makes sense to buy GBPUSD when the dollar strengthens.

The Brexit vote has also triggered an important shift in international economic policy. After World War II, industrialized economies favored policies that lowered barriers to economic integration. However, Brexit reversed this trend and protectionionism has come back to the fore. And the Brexit vote has heightened uncertainty. In addition to Brexit, it is likely that the euro will rise against the pound.

The referendum also caused sterling to decline against other major currencies. Fortunately, the effect was not as significant as many investors had expected. Sterling s value rose in January 2017 and fell in February 2018 and again in August 2019. However, the sterling has since rebounded to its pre-referendum levels 3.5 years after the vote. While Brexit has increased volatility, it has also brought a lot of uncertainty for investors and traders.

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