EDITOR’S NOTE: Despite another mini flash-crash on Tuesday, the pound ended up the week almost where it started against the euro, which doesn’t change the fact that, against a basket of currencies, the pound is trading around its lowest level on record on a trade-weighted basis. A currency specialist from TorFX foreign exchange brokers explains how the week ended and the implications for British jobs.
The Pound remained fairly sturdy on Thursday as the ‘Brexit’ debate turned from matters of jobs, trade, economic growth and immigration to something much more dark and sticky. Yes #MarmiteGate stole the headlines on Thursday as Tesco pulled the black vegetable spread from its online store in response to producer Unilever’s decision to raise its pricing. Unilever, which produces Marmite in Burton upon Trent using British ingredients, said that the significant devaluation of the Pound since the EU referendum has weighed on its profits, which are priced in Euros. Unilever announced late in the day that it had solved the dispute with Tesco, which helped the pound on Friday.
The debacle created a little comic relief following a week of doom and gloom for currency traders, which saw Sterling strike a series of multi-year, and at times multi-decade, lows in reaction to the UK government’s apparent plans to ditch access to the single market in return for tighter controls on immigration. However, the fact remains that the Pound’s recent double-digit depreciation means imported products will become more expensive in the foreseeable future and jobs will likely be lost.
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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