All eyes are on the pound as is suffered tremendous low of 19% in value currency, since the Brexit referendum. Months of economic and political chaos reflect in the forex market. In June 2016 Brexit was voted 52% to 48% leading to the end of Britain’s 43-year membership. This dramatic turn of events resulted in people withdrawing investments, questioning their decision and anticipating the aftermath. The fear of recession rises as bank shares drop, $2 trillion gets wiped off the global stock market and the pound collapsed to its lowest level in 31-years.
The immediate aftermath resulted with the Prime minister David Cameron resigning as leader of the conservative party. Being as he was part of the 48% voting against Brexit he saw it no longer suitable for him to be the leader of a decision he strongly opposed to. He believed that Britain would be stronger and safer inside the EU and therefore advised that the country required fresh leadership. Theresa May succeeded Cameron as leader of the conservative party with more than half of MP’s votes and became the new Prime minister.
The political uncertainty added to the economic concern and before being able to recover slightly the pound continued to plunge deeper into the forex market. Following this, the euro dropped against the dollar in the forex market, the stability of the EU and the Euro is also in the public eye as the damage to the single currency is expected to be a concern for long-term investors. However, the euro has become worth considerably more against the pound.
Confusion about evoking Article 50 leaves forex investors hesitant to invest in the pound as it’s been predicted to fall until a deal is reached, but May still struggles to get British MP’s to support her in following through with a final brexit deal.
Ever since 2016, currencies related to the Brexit deal are taking a hit. The euro, considering a largely used currency amongst European countries, has taken a hit from all directions, not just in regards to the british pound. Italy had put in a request for their own currency, stating that the country is in much destaster and truly believe that their own currency that they could identify by will do vasts amounts of good for the economical disaster they face, however, their request was shortly shut down by the EU, and as recently once described by William Hague “The euro is a burning building with no exits.”
Despite all the havoc that has come along with Brexit, the euro and world politics, currencies are still holding strong, not making way for cryptos or any other alternative currency to take the lead anytime soon. The Currency Market is the strongest, safest, yet most volatile market to be involved with at this time, making trading easy for experienced investors in the industry, and even easier for algo trading and softwares.