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No Firm Brexit Deal Forces GBP to Plummet

August 7, 2018 August 10, 2018 Jay Castillo

The Brexit shambles is continuing, and there are now an increasing number of people who are completely and utterly convinced that no deal is going to take place with the UK and the EU and that in March of next year the UK will crash out of the EU.

In fact, the value of GBP has been bouncing up and down over the last few months, but this morning it has taken a serious hit against all other major currencies, and whether that is something that could continue well into the day is open to debate.

But, there are many Forex Traders that are of mind that GBP will continue to fall in value, and could much sooner rather than later be level with the Euro. Many of those traders are therefore placing their Forex trades with just such an outcome being the one they are hoping for.

However, having said that there are many commentators who are convinced the drop in regards to the fall in value of GBP is not going to continue, and whether the UK does or doesn’t work out a deal with the EU, the value of GBP will shoot up.

 Money Markets Will Determine the Value of GBP

As is always the case though, at the end of the day it is going to be the money market that are ultimately going to determine the true and very real value of any currency and that does include the value of GBP.

There is not likely to be an intervention by the Bank of England to step in and buy Sterling if its value continues to fall, and that may be an indicator the powers that be in the organisation expect GBP to recover all lost ground.

Traders Hedging on GBP

Due to the volatility in regards to the value of GBP, I am also aware that many traders are not only trading on the short term value of that currency but are also placing some much longer term trades too.

The main reason as to why they are doing so is that the can hedge their trades over both the long term and short term, and those trades do of course have plenty of additional currencies that they can pair up GBP with, any of which could rise or fall in value against GBP at any moment in time.

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Jay Castillo

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Jay Castillo is tasked with bringing our website visitors a range of guides that can and often do help them improve their trading strategy, and with that in mind do make sure you keep your eyes peeled for any of his trading guides as you are bound to find them of great interest.

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