On Friday morning, during the Asian Session, the value of the Pound suddenly tumbled by a shocking 6%. It’s the lowest the sterling has been since 1985 and it took mere minutes to fall this deep, hence the name this occurrence was given – “the flash crash”.
The British currency took quite a beating back in June, when the majority of Britons decided to leave the EU. But why would its value plummet again, now that so much time has passed since the Brexit referendum?
Some experts say it was the Conservative Party Conference earlier last week that rocked the boat. Prime Minister Theresa May hinted she may be pushing for a “hard Brexit”, meaning the UK will leave the European single market and customs union. This will entail higher fees on trade between the UK and the EU, border checks on products and in turn – a tougher time for the Pound. Naturally, the market had quite an emotional reaction to such a gloom prospect for the British.
Despite a minor correction, the Pound remains approximately 1.3% down on its Thursday value. Experts agree that the UK’s currency weakness is set to continue. *
Many even believe it could get on par with the US dollar!
This article is not an investment advice.
* Past performance is not a reliable indicator of future performance.Trade here