Currency News: British Pound Weak Amid Bleak Future and Uncertainty
Since the British exit (BREXIT) of the European Union (EU), it’s fair to say The British Pound (GBP) has struggled.
Article 50, is a guideline written up in the unexpected instance an EU country wants to leave the Union. “Any member state may decide to withdraw from the union in accordance with its own constitutional requirements.”
Interesting to note, is the fact that from the time the article is activated, the country has two years to negotiate with the union. In the event of failed negotiations, the country leaves with nothing and is consequently far worse off. Diminishing almost all bargaining power from the outset.
With a six day decline against the Euro and a consecutive week of waning against the USD, things don’t look like they’ll be improving any time soon. New reports released on the 10th of March quantify a decrease in Manufacturing and Industrial production, with construction output seeing a surprising increase.
Also, noteworthy, is the six-month low of demand within the housing sector, a rise in consumer debt and sub-par growth for UK house prices and retail stores. According to the British Retail Consortium, non-food items fell on an annual basis for the first time since 2011. The lack of consumption can be explained through the recent rise in inflation rates, stemming from the pounds BREXIT.
Next week looms as essential within the currency market, with big announcements set to come from the Fed and Bank of England (BoE). The UK is also set to publish much-anticipated wage data which will give a more quantifiable idea of where the country is truly at economically.
Keep checking for more currency updates. For full currency forecasts and investment advice by our state of the art algorithm click here.