FOREX NEWS: Pound hammered by Brexit vote

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The pound has been hammered by yesterday’s UK vote to leave the EU. A currency exchange specialist from TorFX explains.

The British people have spoken and decided that the UK should leave the European Union. Overnight, as the results were flooding in the pound dropped to a 30-year low against the US Dollar and fell by nearly 10% against the euro.

The stock markets opened and have reported losses of tens of billions of pounds. To compound the issue, Prime Minister David Cameron has announced that he will step down in October, stating that “fresh leadership” was needed.

The volatile markets are still trying to come to terms with the shock 51.9% of the votes going the way of those wanting to leave the EU. It’s likely that any rates that I quote now will change sharply by time that you are reading this but we ranged from €1.3150 to €1.20 over night and the worse could yet still be to come.

SNP leader Nicola Sturgeon has said that a second independence referendum in Scotland is now highly likely which will create a lot more uncertainty about Britain’s ability to emerge from what is already seen as an economic disaster.

What troubles me is the distinct lack of comment from any of the Brexit campaigners about what the plan on doing to stabilise the economy. We have to remember that the foundations that this was built on were already incredibly fragile. We’ll have to wait to see what the government and Bank of England propose to do next, but those of you needing to buy euros should seriously consider securing a rate of exchange soon as the uncertainty and potential for further losses is very real.

This article is written by a foreign-currency broker working for TorFX, a forex broker established in 2004 to provide foreign exchange and international payments to both individuals and companies. TorFX is authorised by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services. Their FCA number is 517320. To verify their authorisation, you can visit the Financial Services Register and search the register using their FCA number. SPI is not responsible for the opinions of guest contributors.

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2 thoughts on “FOREX NEWS: Pound hammered by Brexit vote”

  1. Profile photo of GarySFBCNGarySFBCN

    As wages fell for many working people and with the threat of privatizing healthcare services and other issues, there seems to have been many – the majority of voters – who were concerned enough with these issues to risk leaving the EU.

    As an ignorant outsider and as someone who supported the UK staying in the EU, my observation is this: 1) There were racist and xenophobic leaders who were able to tap into working people’s concerns about wages, etc. Of course blaming immigrants and continuing to shield large businesses who game the system for their own benefit at the expense of real wages for real working people is despicable. 2) The ‘remain’ campaign appeared to scream ‘racism’ every time someone said they supported Brexit, instead of giving thoughtful consideration to the underlying issues and suggesting a path to address those issues. Not all who support Brexit are racist and with the vote so close, this was a lost opportunity on for the ‘remain’ campaign. 3) There was so much repugnant ‘elitist’ commentary about low information voters, uneducated, etc, so repugnant that it seems to be competing with the rampant racism among some in the Brexit camp, that it is no wonder that no minds were changed.

    Sadly, I don’t know how the EU is going to go forward. It seems to be an entity that supports global business at monetary expense of the people and at the expense of will of the people who support human rights, environmental protections and scientific advances. Combine that with the fact that nobody seems to be working on the EU’s Achilles heel, that when a member country is in crisis, they need to be able to devalue their currency OR receive grants (not loans) from the central governing body.

    Hopefully, the leaders of the EU understand that they need to be nimble and able to quickly respond to crises, and that the priority should be people first then businesses.

  2. Profile photo of mhmh

    The worst aspect of the post-referendum period – say the next two to three months – is that the UK now relies on a lame duck government, consisting of people who did not want nor expect Leave to win, to calm the markets, reassert control and provide leadership. It will not happen!

    Our only hope is that the summer rain will bring some respite. Or, if we are really unbelievably and outrageously optimistic, we could expect the EU to take note and have a major strategic rethink before returning from its all expenses paid summer holiday with a new vision to address its serious loss of credibility.

    What a sad state of affairs we, Europe, find ourselves in – and all man made!

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