The FX landscape has changed entirely since ‘Brexit’ became a reality. We will be sending out a detailed report towards the end of this week with our thoughts and suggestions once the initial dust settles somewhat.
To summarise things –
· GBP/USD came off to levels not seen since 1985 touching 1.3232
· GBP/EUR has printed fresh lows today
· Investors flocked to safe havens like Gold and the Japanese Yen
· Rate cuts from the Bank of England are now expected
· David Cameron resigned as Prime Minister
· There will be a Conservative leadership battle
· The Labour Party have had a raft of resignations from the Shadow Cabinet and are to have another leadership election.
· The SNP are likely to call a Scottish referendum on EU membership at some point
· Political instability will now be the story for the next 3 months before Article 50 is implemented (Process for a member state to negotiate its exit from the EU)
If you look at the graphs below on GBP/USD and GBP/EUR you can see the movements from last Monday morning to this morning.
Markets are going to be incredibly volatile for the foreseeable future. Evidently, there is a multitude of factors that will determine the direction of markets in the short to medium term and I would suggest putting a plan in place as a starting point. If you are a seller of USD and EUR into GBP then please do consider taking advantage of these moves in your favour. If you have a requirement to purchase USD and EUR from GBP then please do contact the office and we can discuss your individual requirements. Every currency pair has moved substantially so we will be on hand to discuss any that impact you.
If you have any questions or wish to schedule a call please contact me directly.
Written by Liam Alexander