The Brexit ‘show’: What does this mean for the currency markets?
It has been fast-moving since UK voted to leave the EU. Theresa May became the UK’s second female prime minister after David Cameron resigned in 2016. Theresa May is adamant on a ‘hard’ Brexit and said ‘’Together we will build a better Britain’’ when she stepped in at Downing Street last year. She is confident that a divorce with the European Union will have a positive impact on the UK. President-elect Trump supports her statement when he said ‘’The UK is doing great following its vote to leave the EU.’’ in a recent interview.
Theresa May prepares to deliver a ‘clean Brexit’ speech tomorrow according to some government sources. She has appeared to suggest that Britain is preparing to leave the single market during Brexit. Speaking to Sky News, Mrs, May highlighted that she will be able to control immigration during Brexit negotiations. However, critics believe it will be difficult for the UK government to secure access to the single market while also trying to have control over immigration. Theresa May is committed to reduce net immigration to below 100,000 annually. In June 2016, net immigration from the EU were 189,000 out of 335,000.
Financial markets crash over fears of a ‘clean Brexit’
The pound has already reacted negatively in response to Theresa May’s Brexit talks last week. Tomorrow will be no different. However, Brexit has not been a total fiasco for the UK market. Every movement in the market has a negative or positive impact on currencies. A weaker pound is unfavourable for holiday makers or for the import business, however, it’s equally good for tourists or if you earn money overseas. A weaker pound also makes exports more viable.
Theresa May’s speech tomorrow will be the biggest scheduled event in Global FX this week.
Tomorrow is another crucial day in ‘Brexit land.’ Mrs May ‘s speech will undoubtedly cause volatility in the market which will in turn affect many businesses when it comes to making international payments. The pound is the main victim when Brexit is in the limelight. Our professional traders at Indigo FX have thus set up a winning trading strategy for our clients to help them protect their bottom-line. We suggest hedging your exposure to Sterling today as we are expecting some massive moves in the Pound tomorrow. Call us on 020 7856 2467 for more details.