How Brexit Could Affect Your Investments
While there are too many unknown factors for this to be a routine matter, there are some important points that will help you to understand what might happen in the months ahead. What type of investment could turn out to be the best for you in this period of change? Forex Trading Matters One of […]
While there are too many unknown factors for this to be a routine matter, there are some important points that will help you to understand what might happen in the months ahead. What type of investment could turn out to be the best for you in this period of change?
Forex Trading Matters
One of the most obvious impacts of the Brexit process to date has been on the British Pound’s exchange rate against the Euro and the US Dollar. A look at the timeline since the voting took place shows us how the Pound has fallen sharply due to uncertainty about the future.
Are we going to see the Pound fully recover once Brexit is finalised? There is a huge question mark over this point right now. Naturally, this opens up the possibility of making money if you trade on the right currency pair at the right time. A big swing either way can be profitable, depending upon the trade you make.
It is also worth remembering that investments held in foreign currencies will be affected by any movement that the Pound suffers. If you have a property or a savings account in another country, then the way that the currencies move will make a difference to your overall wealth.
The FTSE Stock Exchange
If you have stock market investments then you will want to keep a close eye on the FTSE 100 to see how it reacts to each different phase of Brexit. To date, the FTSE has been affected positively by the news about the UK’s split from the EU.
Will this carry on, though? There is a link between the performance of the Pound and the performance of the FTSE. However, while the Pound has fallen, the FTSE has surged by 30% at the same time. How is that possible?
The general feeling is that the falling Pound has benefitted the companies with overseas earnings that appear on the UK’s stock market. This means that the money that they make abroad is worth more in Pounds than it was before.
The Confidence to Invest
One of the big areas of concern that has come out of Brexit is the importance of confidence in the economy. The uncertainty around the UK’s future is one of the main issues that have dented confidence in the business world in recent times, according to the Institute for Directors.
In terms of investing wisely, this confidence should come from knowing what is really going on. If you are fully informed, then you can feel ready to make smart investments regardless of the prevailing economic and political climate.
It is certain that Brexit will continue to provide risks and opportunities for investors. If you can limit the risks while taking advantage of the opportunities, then it could turn out to be something that proves hugely beneficial to your future.