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.