Brexit Weighs Down on the GBP

With the Brexit now on everybody’s lips and mind regardless of whereabout on the globe they are, cyprusthrive could not go silent on the subject either.

The Telegraph reports that the UK’s PM  Theresa May  announced the end of free movement of EU citizens towards the UK as early as next month. Additionally, press, public opinion and political analysts alike expect her to officially let Europe and the world know about her firm intentions to trigger the famous Article 50, which will no longer allow any EU citizen travelling to Britain to reside in the country permanently. Iain Duncan Smith, a leading MP who embraces Eurosceptic views, said that the British Prime Minister’s announcement marks her clear position towards taking control of the country’s borders while signaling alarm to the already 3.6 million EU migrants who live and work in the UK that it’s time to pack their bags and return to their home country.

How will this impact UK’s economy? What does the future hold for the GBP? These are questions that yet need to be answered.

However, at this point in time, Theresa May’s announcement weighs down on the GBP, financial experts say. So if you’re planning to trade GBP/USD, you need to be watchful!

Useful things to know

Losses on the GBP/USD have continued to soar over the last 24 hours. Time for a reversal? At what point? Perspectives are still gloomy, with the Sterling under a lot of pressure this week. The major reason – the Brexit! Once Article 50 is invoked, there’s no turning back.

To put the icing on the cake as they say, the Scots want another referendum for independence and break away from the UK, if the rumours hold true. Although hardly has this rumour been followed through since the weekend, this kind of small talk, with the due inverted commas, is unlikely to muffle down soon. Additionally, the greenback is jumping from strength to strength since the beginning of the week, adding to the GBP/USD pair even more pressure. Have a look at the chart.


Image credit: FX EMPIRE

The markets are becoming increasingly comfortable with Trump’s measures as the uncertainty hovering above the US public opinion slowly starts to fade. Consequently, the dollar gains strength and spikes by the hour.

This being said, there’s little chance that the GBP/USD pair will come out of the pressure zone any time soon, professional traders suggest.

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