in Forex Trading

Brexit and what it means for the UK and GBP


There is a lot of uncertainty with the GBP currency right now as traders are nervous about what to expect with Brexit and how that will effect the pound long term.

At the time this article was posted the GBP was at a 31 year low against the USD as shown on the monthly chart below.

GBPUSD 31 year low

What is Brexit

Brexit is the UK leaving the EU. A referendum vote was held on the 23rd of June 2016 to decide if the UK should leave or stay a member of the EU. 52% voted to leave and 48% to stay.

If the UK leave the Eurozone than the UK will have two years to renegotiate all their trade agreements with their European trade partners.

Many countries in the Eurozone have indicated that they are going to be tough on the UK when renegotiating trade agreements as a sort of punishment for leaving the EU.

When will the UK leave the EU?

For the UK to leave the EU they need to invoke Article 50 which gives the UK and the EU countries two years to make new agreements with each other.

UK Prime Minister Theresa May has said that this will be done by the end of March 2017.

No one has ever issued Article 50 before so the UK will be the first and for the UK to leave the EU 27 national parliaments need to agree to the terms which means the UK is in for some lengthy negotiations as many EU countries have said they will be tough on the UK.

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