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You are here: Home The Brexit debate Philippe Gelis, CEO and co-founder Kantox (Foreign exchange (FX) platform)

Philippe Gelis, CEO and co-founder Kantox (Foreign exchange (FX) platform)

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Despite the endless headlines about Brexit, the reality is that many people were not prepared for this scenario. In this respect, this looks like the worst planned Referendum in history - not in terms of the vote or the campaigns, but because no one really knows or prepared for the actual implication of the result.

We cannot be naive: what we are facing here is not an only-British issue, but a European one. Spain is having a General election vote in two days. Everything is connected. We’ll soon discover how today’s result will affect them. Businesses operating on a European level need to brace themselves for continued volatility that can be expected to continue for many months, if not years, to come.

In terms of foreign exchange, it looks clear that markets will overreact in the short-run. We have already seen GBP drop to its lowest level since 1985. Some analysts point out that the markets could suffer a devaluation of 20%. Today’s world economy is global, and the exit of UK will affect every currency. Especially, the USD, whose relationship with the EUR and GBP is very narrow. The GBP’s stabilisation will depend on the announcements disclosed in the following months, and the agreements reached (and the way those affect the different industries exposed to GBP, including investments and external trade.

 

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