British pound maintains its exchange rate even after Brexit

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The exchange rate of the United Kingdom of Great Britain and Northern Ireland – the British pound (GBP) – is currently strengthening against both the US dollar (USD) and the Euro (EUR) despite the considerable turbulence associated with the UK’s departure from the European Union (EU). According to analysts and financial strategists, there is a strong assumption that the GBP/USD currency pair could reach an exchange value of US$ 1.39 per GBP as early as March 2021.

On 15 January 2021, at 7:34 am CET the GBP/USD currency pair traded on the international foreign exchange – Forex market at a mutual exchange rate of US$ 1.3669 per GBP with the current daily weakening of the GBP by -0.13% against the USD. According to analysts, this current weakening of the GBP is mainly due to the current trading trend of the Forex market, with the USD strengthening globally. In contrast, the GBP strengthened against the EUR during the second week of 2021, when its exchange rate dropped below GBP 0.9 per EUR, and currently on 15 January is trading at GBP 0.888 per EUR.

Analysts and foreign exchange market financial strategists pointed out the fact that since Brexit the GBP has strengthened. According to these experts, the strengthening of the GBP exchange rate against other major world currencies was mainly influenced by the fact of the relative newly acquired independence of the UK economy after leaving the EU on 1 January 2021. However, another factor is the favorable situation on the Forex market, where the USD has weakened globally. Predictions by these experts indicate that despite the subsequent expected growth of the USD, the GBP will continue to strengthen.

However, the exchange rate forecast from a large number of analysts who estimate that the GBP/USD exchange rate will be US$ 1.39 per GBP in the spring of 2021, has cracks with regard to issues related to the global financial center in London. A part of the administration, after the departure of the UK from the EU, has already been relocated or is planned to be transferred to countries in the EU, especially Germany and France. Another factor that now threatens the growth of the British economy is the fact of a considerable administrative bureaucratic burden in the mutual import and export of goods with EU countries even though the British side managed to maintain zero tariffs under the Brexit Agreement. However according to analysts, there is still a significant assumption that even these current issues will be resolved in a relatively short time and investor sentiment will thus retain a positive outlook regarding the growing GBP exchange value.

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