Don’t write off Sterling prematurely

[fahdforex]

 

The value of Sterling plummeted after the Brexit result, but positive long-term economic predictions suggest it will remain a strong currency into the future 

Last June’s post-Brexit vote sent Sterling values plummeting against every major international currency. It was the inevitable consequence as the market tried to price in the negative implications for the UK economy. 

As unexpected as the vote to leave was, the market reaction – perhaps overreaction – was entirely predictable. The vote was preceded and followed by a raft of analyst predictions of a weak GBP. The main fear was that Britain’s economy would grow more slowly outside of the EU. 

However, pro-Brexit economists argue leaving the EU would initially cause a downturn but result in boosting the economy later. 

Sterling recovers despite gloomy predictions 

Despite difficult Brexit negotiations and the continued uncertainty surrounding the UK’s relationships with the EU going forward, GBP’s subsequent recovery says plenty about its historical importance and longevity and that needs to be factored in when predicting its future value. 

GBP’s is the oldest actively traded currency on the foreign exchange market. It is still one of the most popular forex currencies. The result of London being one of the biggest trading hubs in the world. 

Political uncertainty and war has triggered volatility in GBP’s value over the years. However, it has always stood the test of time and has been relied upon as a global safe haven for investors. 

History seems to be repeating itself.

 

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