The avid traders of “Cable (GBP/USD) pair from around the globe have been keenly following the events of Brexit since the second quarter of 2017. Owing to its gravity, it is given to have a strong impact on the value of Pound Sterling in the global forex market. As such, political affairs circling Brexit have surely been the primary market mover for GBP/USD for the past several months.
Brexit Deal – What Does It Potentially Mean For The Forex Traders?
As per the Financial experts, a Brexit deal with the European Union (EU) that equally satisfies both the parties about an aggravated issue regarding Ireland is being pushed farther from reality with time. The talk of “Cable” dropping to 1.10 level in an event of a no-deal Brexit has been hot in the world of foreign exchange. However, perhaps due to the increasingly slimming chances of the UK government to find a pragmatic solution that revitalizes the hopes of a deal with the EU, analysts have been reluctant in discussing the other side of the coin. How may the forex market respond in an event of a deal?
Analysts’ View Of The Post Brexit Deal Market Movement
As per the Rabobank Analysts, the political and economic scenario revolving Brexit is likely to cast the strongest impacts on GBP/USD and EUR/GBP pairs. While the former currently trades around 1.23 level, it is being anticipated that a fall to 1.10 level in an event of no-deal is imminent. However, if a deal is struck between the European Union and the government of the UK in an unlikely turn of events, a rise to 1.30 level is in sight on the up side, as per the analysts.
September has been a busy month for the parliament in terms of addressing the affairs concerning Brexit. In light of such events, there is a general consensus among the experts about the likelihood of a further delay (beyond October 31st) for the start of Brexit to January 31st.
If it is further pushed forward, the EUR/GBP pair is being predicted to trade around 0.9 level for a period of three months until the Brexit deadline approaches. Provided that a deal is signed between the EU and the UK government, the pair is expected to fall and settle around 0.85 level again.
Brexit events have surely been quite a see-saw for GBP/USD and EUR/GBP pairs for several months. Until the deadline strikes and a deal or no-deal is finalized, it looks like these pairs will continue taking the avid traders on for an adventurous ride.