Brexit doesn’t look so bad now, does it?
Skerdian Meta • 2 min read
Do you remember the stages the Brexit process has gone through up until now? First was the ignoring phase before the referendum; the market wasn´t worried because no one believed the Brexit side would win. Then the panic gripped the forex market in the following few days and the GBP went in a freefall.
After that came the phase when the panic spread into the businesses. The economic data released in early August was horrible. Now we´re in the phase when the fear is wearing off and the market is trying to figure out what the outcome of Brexit would be for the British economy. The market is more relaxed now and has a tendency to see the glass half full. After all the panic and the horrible economic data, whatever is not really really bad looks good enough for the forex market. That´s human psychology as well as market psychology.
Now that the panic is over the companies are back to their senses and the money is starting to flow again. The construction sector has been contracting in the last three months, but the construction output numbers which were released a while ago showed that this sector is back to being flat. That looks pretty good after three months of contraction.
The trade balance deficit is lower as well and the BOE (Bank of England) inflation projections have gone up for the year, but that´s not really a surprise with the 15-20% decline in the GBP. The Pound is marginally higher after the data was released which looks good for our buy forex signal in GBP/USD. Let´s see what the next phase of Brexit will be.
The price is finding some support in this forex pair after two days of decline