Sterling (GBP) Weekly Outlook – The EU/UK Trade Negotiations – It’s Time to Decide
There is no doubt that the upcoming European Union/ UK Trade talks on a Comprehensive Trade Agreement will have an impact on the exchange rate between the two countries. Sterling has already lost significant value due to the slowing of economic growth in the UK, but the outcome of these talks could prove more significant and affect the value of the British pound.
If a deal is made with the EU, there is a chance that Britain’s membership of the European Union will come to an end. However, this would still leave open the possibility of the UK remaining in the EU in some form, and may allow for free trade within the single market.
weekly outlook | European union} In the meantime, the future of the United Kingdom, especially the economic and political status of the country, could also be influenced by the EU/UK negotiations. An agreement could make it more likely that the country maintains its trading relationship with the rest of the world, but it could also mean that Britain takes on a less prominent role in the world economy. This would likely mean a change of role for the UK’s economic minister, which could put more power in the hands of the European Union.
weekly outlook | uk} With regards to the Pound Sterling (GBP) Weekly Outlook, it seems as though many traders feel that there is little chance of a major impact in the coming days on the value of the pound. Sterling has dropped substantially over the last few months due to the global credit crunch, but the recent weakness in the UK economy has resulted in the value of the currency falling back somewhat.
weekly outlook | uk} If the deal reached with the EU and the UK Government can still be salvaged, then it may be enough to keep the pound in place and allow the country to retain its strong position in the world economy, but this still doesn’t guarantee a future for the pound. A deal that was too large and too quick could leave it facing greater depreciation than would have otherwise been expected, especially considering the recent weakness in the UK economy.
weekly outlook | uk} The key reason why the value of the Pound Sterling (GBP) Weekly Outlook has remained the same so far as the negotiations have progressed is because it appears as if the two sides are still negotiating behind the scenes and are not really ready to make a final decision. This means that the potential for a deal to be struck at any time, even the soonest time, remains uncertain, even though there has been some optimism surrounding the ongoing negotiations.
A lot of people who follow the developments on currency markets are predicting that a deal will be struck soon, but it still remains to be seen what the final result will be. With a deal still being worked out behind the scenes, the future of the pound will remain one of the biggest factors influencing the future value of the currency in the months to come.