The following article is a guest post.
The Brexit has had a huge impact on many different industries and the full reverberations of Britain’s decision to leave the EU are still yet to be felt. The forex industry is one which is particularly important to the Brexit, with the value of currency being intrinsic to its trading success. The full impact of the Brexit on the forex industry will come to light over the coming years, but here is what we know about its immediate effects so far:
The Value of the Pound
The value of the pound plummeted to its lowest value since 1985 on the 24th June, the day after the EU referendum, causing a market meltdown. The FTSE index 100 fell by 8% causing panic and gradually since the market has begun to increase with the value of the pound creeping back up slowly back to what it was earlier this year. It’s hard to say what is going to happen next, as no one can predict what changes are going to happen in the market but by keeping on top of economic events across the globe with an economic calendar, this should give some warning of events which could cause things to change.
Gold and Precious Metals
The value of sterling falling means that investors with stocks and shares can start to panic about their investments. One of the positives of this for the forex industry is that gold and precious metals tend to hold their value better in times of uncertainty, making them a much safer and more attractive investment for the future. Investors are looking to spread their investments to guarantee more financial security by investing in a combination of different assets.
Uncertainty means that Brexit-related developments could still impact on forex, especially companies based in the UK or the EU. With a lot of the legislation that dictates rules and regulations for the forex market being derived from the EU, its likely there is soon to be some changes made by government officials in the UK but so far nothing has been confirmed.
It’s unclear to what extent exactly the Brexit is going to have on the forex market but it looks set to be shaken up. With British politics fairly unstable at the moment and a period of change set to come, there’s no way to predict what the full impact of the Brexit will be just yet.