British Pound Continues Slide as Rhetoric Proves Ineffective

Britain’s currency is taking a pounding.

GBP after Brexit

As the global financial markets Monday tried to find a footing after U.K. voters Thursday — in late results that affected the market Friday — decided to sever decades of ties to the European Union, currency traders continued to dump the pound. Sterling fell to a 31-year low against the dollar, extending losses to nearly 12 percent from levels before the Brexit results were announced.

Assurances from British government officials that the economy is sound as well as central bank pledges to defend the currency did little to stem the slide. British bank stocks were also hammered.

“The U.K. has entered a period of acute and extraordinary uncertainty not seen since the Second World War,” said analysts at IHS Global Insight in a note to clients. “The [country] currently does not have a political leadership or a cohesive government, let alone a plan with which to navigate a way forwards.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza