FX FUNDAMENTAL ANALYSIS
Trade deals are based on market size - and as it will no longer be part of the EU - Britain now has increasingly less leverage. Tis may mean it would be difficult for the UK to secure good trading deals by itself.
Scottish
again? If
independence... the whole
Brexit process wasn’t complex enough, we now have the Scottish Nationalist Party (SNP) pushing for a second independenc e referendum in 2018-19.
Their argument is that the UK is now a very different union from the one the Scottish electorate voted to
remain part detrimental to Brexit negotiations.
If a second referendum is granted, we can expect to see another bout of uncertainty grip the financial markets, as the UK’s future is again thrown into question. Should such a scenario arise, traders can expect downward pressure on GBP.
2017 increased to 2.3%, from January’s rate of 1.8%. Keep in mind that the Bank of England’s inflation target is 2%. Inflation is projected to hit 2.8% in 2018. Should inflationary pressure continue, it could force the Bank of England to raise interest rates.
of back in 2014. What’s interesting to know is that 62% of the Scottish vote backed remain in 2016.
Te Scottish parliament has recently backed Nicola Sturgeon’s (First Minister of Scotland) call for a second referendum. However, the UK government have so far denied the request, arguing that the timing of such a referendum would be
30 FX TRADER MAGAZINE April - June 2017
Should inflationary pressure continue, it could force the Bank of England to raise interest rates
Monetary policy
Traders should monitor monetary policy moves from the Bank of England very closely over the coming months, as they will have substantial consequences for the strength of the pound.
In particular, traders should watch inflation. UK inflation for February
So what’s caused a spike in UK inflation? It’s actually the weaker pound. Importing goods from abroad has become more expensive for British businesses. As such, consumer prices have i nc r ea se d . Remember, it’s the task of the Bank of England to ensure that changes to consumer prices are stable.
For now, the
position of GBP remains volatile and liable to change. Interest rates could move in either direction according to the Bank of England governor, Mark Carney, as the UK economy adjusts to life outside of the European Union.
Chris Svorcik Forex Educator Admiral Markets
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64
