Economy - - Dec 23,2016
The recovery of the pound post Brexit scares, would be soon hampered by another session of Brexit heat, as per analysts.
According to analysts at Nomura, the current levels might be extremely optimistic, as it's very difficult to determine what the market is dealing in, especially when no one actually knows what type of agreement the U.K. government will come up with the EU. Nomura also revealed that, market speculations states that it can be a "hard, soft, flexi and transitional Brexit".
There are several hot issues that will surely determine whether the Brexit is hard, soft or somewhere in between, whether free movement of people will be accepted and whether the U.K.'s financial contenders will retain "passporting rights" within the same continent.
After U.K.'s late June vote to exit the EU (European Union), the value of pound slipped to as low as $1.1450 during October’s beam crash. But the 30-year low currency mark recovered after Donald Trump's surprise U.S. election win. This boosted the levels higher than $1.27 in early December.
On Thursday, the pound was grabbing $1.2361.
As per the managing director at IMA Asia, Richard Martin, the noted value of pound reveals Brexit as a slow-moving disaster for the whole of Britain.
Martin also expected the upcoming year to kick-start with mixed stories about the U.K.'s economic perspective, after sighting numerous ‘activities’ from Japanese industrialists who are utilizing the pound's drop as a golden opportunity to buy British assets for acquiring a significant platform in Europe. However, Martin also said the year 2017 will also clear that Britain just detached itself from the biggest market across the globe.
Clouds of uncertainty are quite thick as the U.K. is yet to officially conjure Article 50 of the EU treaty, which initiates a two-year negotiation period for the terms of the exit process.
Court challenges to Brexit are currently active.