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Future of Pound in the Forex Market Depends On Brexit Negotiations

April 18, 2017
By Anatol Thomas
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The long term investors in the forex market are unable to make a prediction for the future of the Sterling Pound. The Brexit vote in 2016 has pushed the pound down in the forex market. The strengthening of the US dollar and the weakening of the pound has made incredible changes in the trades of GBP/USD. Now that Article 50 is invoked, experts are looking for proper negotiations between the UK and EU.

The need for soft Brexit is crucial for both UK and EU because there are a number of economies at stake. While it is certain that the negotiations will affect the British economy, the same is true with the economy of several countries in the bloc.

According to market experts, a deal that both UK and EU is happy would help the GBP/USD to climb up to 1.50, while a hard Brexit would push the pair down to 1.10. However, many economists predict that the upside will be capped at 1.30, while the downside won’t go below 1.17. Long term investors are unsure of the direction of the pound, as they may just flip a coin and decide. Day traders too are struggling with GBP/USD, as the currency pair simply travels sideways in a broad spectrum.

Industry experts believe that a deal suitable for both UK and EU is more likely. Germany won’t be interested in giving up the possibility of selling vehicles in the UK. France also wouldn’t be interested in sabotaging the daily industry. Poland too wouldn’t want to spoil the employment opportunities for its citizens in the UK.