The Impact Of A Hard Brexit On Trading

As we all know Brexit is one of the biggest political events to take place in the UK across a few decades. The relationship of Britain with European Unions has been unsure since Brexit and its impact on the Forex market and other global markets is also unclear. Although no matter the impact there is certainly going to be a long lasting effect.

GBP Perspective:

Due to the surprising events of Brexit the Pound Sterling has suffered. It was predicted that because of the country’s high debt situation the exit from the European Union would ultimately mean that the UK would be failing to pay its loans. Fortunately the Forex market is stable and wasn’t dramatically affected by the exit. Traders have to keep a close on eye on their investments and for opportunities.

Brexit effect on markets:

The UK has about 44% of its exports that go to the European Union and 7% of the European Union’s trade is made up of the UK’s exports. But the effect of a Brexit would mean that the trade would decrease considerably. It’s highly likely that both the EU and the UK would experience a financial slump. However, it is precisely in these situations that anyone involved with CFD trading at brokers like City Index, can prosper and hopefully see profit.

Forex:

The pound sterling is likely to fall considerably if Britain does end up moving towards a hard Brexit. The Euro could also possibly suffer because of the huge economic shock but the dollar could benefit and increase should investors look to invest their money in a protected economy. This can present an opportunity for Forex traders as they look to take advantage of sharp movements in the markets.

Stocks:

On the basis of stocks you need to be confident precisely which companies and industries are most likely to be negatively affected by tariffs, border checks and service regulations. The EU tariffs are extremely high when it comes to agricultural products, clothing, vehicles, food and tobacco.

Furthermore, when assessing border checks it is inevitable that changes in protocol here are most likely adversely affect manufactured goods which include electronics, cosmetics, perfume and sports equipment. This sentiment is also true when it comes to services such as airlines, transportation businesses and financial services, where the main fear is how EU regulations will affect the business.

Commodities:

A hard Brexit could have different effects on investors. Investors could seize the opportunity to invest in safe and secure assets; this would ultimately mean that the price of valuable metals such as gold and silver could rise. There is bound to be a decrease in demand which means that there will be an increase in inflation.

The impact of a hard Brexit is clearly going to have a strong effect on trading but this means that traders or rather investors need to make smart decisions and be wise with what they invest in. With safe and smart decisions those who trade could ensure that they are not affected by a hard Brexit.