What’s next for the currency markets now that the vote for ‘Brexit’ is official?
We are all still reeling from the results of the Referendum on the UK’s membership of the EU, and the news that the UK would be leaving. Of course, the most significant effect we have seen thus far is the position of sterling in the currency markets, with the British currency weakening against the dollar and the euro in the immediate aftermath of the voting, and showing continued volatility in the days that followed.
Looking at the sterling-euro rate seen on 6th July 2016, 1.618, it is clear to see just how much the currency has been affected – not only in the week since the results were announced, but in the uncertain period in the run up to voting day. This is not only a heavy drop against the rate of 1.3129 that we saw as the polls closed on 23rd, when a ‘Remain’ victory was expected, but this is also significantly lower than the dizzy heights of 1.4405 that we saw last summer.
However, it is important to remember that it was only in 2014 when the rate rose above 1.20 for the first time since the global economic crises rebounded across all markets in 2008 (aside from a brief push to 1.2879 in the summer of 2012), meaning that the amount of euros you receive for your sterling is still significantly more than you would have received before this point.
We expect the currency markets to continue moving over the coming days, weeks and even months, as we begin to learn more about what this could actually mean for the UK, the EU and beyond. This makes it a great time to speak to the team at Smart Currency Exchange and organise any currency transfers that you need to make when purchasing property overseas. You can also take advantage of all the expert currency guidance you need to make the most of your money in your pocket, even if you are still deciding what your plans are.