Impact of Brexit on Online Currency Trading
The decision by citizens of the UK to leave the European Union came as a shock to the world and rattled the foundations of the bloc of European nations. Since the decision, European leaders across the content have been forced to take a second look at their countries’ positions and decide whether they too should take the step to leave the EU.
And besides the political consequences, there have been some serious economic repercussions as well. Immediately after the vote, the British pound fell in value and remains near a 30-year-low according to the BBC. The country's decision to leave the EU has had an impact across the globe, on the pound's valuation against other currencies and on currency trading. (For those of you who aren't sure what online currency trading is, you can learn more about it here).
What Is Brexit?
On Thursday, June 23, 2016, a referendum was held in the United Kingdom to decide whether the island nation should remain in the EU, or leave. The United Kingdom – composed of England, Scotland, Wales, and Northern Ireland – decided in a vote of 52% to 48% to leave the EU.
Since the referendum, there have been some serious changes in the UK. First, British prime minister David Cameron immediately resigned from his post and the Theresa May took his place as the new prime minister of the UK.
The country is now working to decide what the referendum results actually mean. The UK has decided that they will begin the official process to leave in the EU in March 2017, meaning that by March 2019, the United Kingdom will no longer be a part of the EU.
But many questions are still unanswered regarding the future of economic and political policies in the UK in relation to the EU. Will the UK preserve economic ties with the EU? Will there still be freedom of travel between the UK and EU nations? All of these questions have led to high levels of uncertainty and speculation.
What Does This Mean for Online Currency Trading?
For traders, Brexit may offer an opportunity to make some money. As currencies change in value, those involved in online currency trading have an opportunity to buy, sell, and trade these currencies and make a profit off the changes in value.
The British pound offers potential for online traders because of the political and economic instability in the UK. The currency is likely to face price fluctuations, meaning that savvy traders may be able to buy the British pound low, and sell high. Just be sure to do all your research before trading because currency fluctuations are unpredictable and likely to undergo sudden changes.
There are some other events that may offer opportunities via online currency trading. Italy and France are both undergoing political changes, and talks have arisen in both countries about leaving the EU like the British. As a trader, you should keep an eye on these markets because if they decide to leave it could have a serious impact on the Euro.