Aftermath of Brexit and the future of GBP
Recently, Britain has come out of the European Union due to many factors, but it has given rise to some concerns. Britons voted cheerfully to celebrate this new era but this has some severe consequences for the economy that the world is seeing at this moment. Many transnational businesses are struggling to continue their operations overseas as this requires a ton of paper works and increased administrative costs. Everything going to and from Britain is now subject to new taxes. Many commercial organizations are considering opening new branches in the EU but the concern remains about whether this would be able to provide essential or sought-after commodities to the British. Though the government has advised the incurring cost is not bearable for many companies.
In this context, the whole United Kingdom is in a dilemma. To make matters worse, they are one of the worst suffers of the Coronavirus pandemic. Going through a series of lockdowns has failed to improve the situation. The only question that remains is how this will affect the valuation of the British Pound. This is one of the most traded currencies in Forex but lately it has been going through turbulence. Traders frequently use this currency but times have made them wary of the future.
This lengthy introduction was essential to provide a glimpse of the context the UK is going through. Before we commence this article, remember vaccines have been introduced and Britain might consider re-entry into the EU. However, we will analyze the possible future based on existing context. What this resource will elaborate on are the probable events traders might experience.
Steep declines or increase in prices
The most immediate impact will be observed on the chart. As currencies are traded in pairs, predictably, pairs including the British Pound will experience erratic movement. Sometimes the price will go up and sometimes down but without warning. As regulations and discussions are still underway, consistency will not be observed. Scalpers are in an advantageous position as they can make a substantial profit. For others, this sector should be avoided. Trading is not a profession where people make guesses but relies on taking calculated risks. Occasionally, people make money but accepting losses as a part of this industry.
To succeed as a full-time trader, you have to trade like the top traders at Saxo bank. Experienced traders analyze the important market metrics and look for the trade signals by using standard rules. But if you intend to make some serious profit, you should learn to analyze technical and fundamental data. Once you become skilled, you can identify potential trade signals even in the extreme volatility of the market. Just for this reason some of the professional traders in Switzerland managed to make a decent profit even during the Brexit event. They took smart steps and turned the economic crisis of Britain to their advantage.
Established of regulations
One of the best things about currency trading is the global economy. This ensures all the prices are consistent and any attempt to manipulate it will be in vain. As the British government is still thinking, they might consider rejoining. If that happens, this would assist in stabilizing the economy. When that happens, the pairs might regain their prior consistency. But the current price action scenario for the British economy is still very sluggish and doesn’t show promising strength for a long-term bullish rally.
Boost in the economy
We cannot rule out the possibility that Britain will emerge strong once again as we have seen in history. The whole world is going through a pandemic crisis and the volatility is probably temporary. Experts may be wrong and this might be happening as a result of other factors. Once the world has recovered, maybe everything will go back to its prior state. As the UK does not have to invest in an economically weak EU infrastructure, this could provide an additional boost to their economy. So, by assessing these important factors, it still pretty hard to assume the future performance of their economy.