As always, the news surrounding Brexit continues to have a series of twists and turns. Initially, the outlook for GBP was looking gloomy, especially as it looked like a no-deal Brexit would have been taken place.
Although there is still a lot of uncertainty surrounding Brexit and the effect it will have on Britain following its exit, there has been some recent news that has meant GBP is currently being seen in a different light.
The positivity surrounding Brexit can be attributed to Theresa May possibly delaying Brexit, as well as Jeremy Corbyn’s Labour Party backing a second referendum that will give voters a chance to vote as whether Britain remains to be part of the EU.
Although the news can be seen as positive, there can be some worry associated with the news. For example, there has been talks of Corbyn being interested in maintaining a relationship with the EU, such as customs unions and access to the single market.
Although this may instil confidence in some, there could be others who feel that such a deal would make Britain a country that will abide by EU regulations, while having no say as to how such rules are created.
As expected, the mixed opinion can mean that there is uncertainty in the Forex market
A Delayed Brexit Could Still Mean Brexit
Backing a second referendum is not the same as a second referendum taking place. Likewise, a delayed Brexit could still mean that Brexit goes ahead, albeit at some point in the future.
This means that although GBP is experiencing a spike at the moment, this could all change as it has done so many times.
For example, the voting on the delay of Brexit will only take place if the next proposal put forward before the EU is rejected.
Similarly, should there be an agreement put in place that satisfies both parties, then this confirmation could also mean that GBP is seen in a more favourable light.
Speculation regarding GBP is likely to remain until a decision is made in any event. As such, investors should be wary and consider long-term trends as opposed to short-term trends at this point.
Although GBP has seen its fair share decline in the past, it has also had its share of the limelight in the foreign exchange market. It may just take longer to see the benefits materialise.
GBP has seen a slight decline in confidence in relation to the consumer market, which stood at -15%
The outcome of Brexit can depend on several factors, including opposition from other members of the EU.
As before, investors will remain wary in relation to GBP investment until the final plan for Brexit is announced.