GBP appeared to be stronger after the two strikes
It is difficult to name any country’s economy, which was not affected by the world events which were going around last year. Unlike other countries, the world’s one of the biggest economies, the UK financial market had to overcome two major obstacles, that rarely happens in a millennium, but the UK had to cope with that in one year.
It is no surprise that the coronavirus pandemic affected the economic situation significantly, due to the closed economy and lockdown not only in the UK but around the world. Additionally, the UK was coping with one of the most important political decisions of its contemporary history - leaving the EU under the Brexit Deal.
Brexit and COVID-19 influence on the UK economy
After the UK referendum decision to leave the European Union was announced, many critics predicted that the country’s economy would go below without its main trade partner. The negotiations between the two sides continued for nearly 5 years and were concluded with the best possible option for the UK’s economy. Trade will not have any tariffs, adding only the demand for the required certificates and additional documents.
Moreover, the Covid pandemic since the beginning of the last year caused great troubles for the economy and tourism which led to the BGP price drop. The country, like many other countries in the world, was trying to survive on its own and many critics were skeptical regarding the uprise of GBP price.
Current Conditions
However, the current circumstances have shown that the positive and effective response to the above-mentioned problems leads the GBP to reach its historic maximum against the dollar for the last three years. This uprise can be explained. According to what top price action strategies in Forex teach us, the demand for the GBP increased and more and more people started trading with GBP/USD. This was caused by two factors -
1. By the covid vaccination - the UK has the fastest rollout per capita, compared to any other populous country. Thus, the economy is preparing for the re-opening, which itself had a positive impact on the GBP price
2. The Ssterling was one of the most sentimental elements of the Brexit Deal which was finally signed in late December, GBP continued its rise against the dollar.
Not only was Washington positive regarding the BGP rollout, but the European stock market as well. As the UK economy, among global economies, is starting to recover, it provokes demand for natural and mineral resources, as British Petroleum oil price was 13 months high.
Conclusion
It is fascinating to observe how the GBP emerged from its lowest price to its highest during the three years. The UK managed to overcome its two major obstacles and make a rollout. Positive and well-planned political maneuvers lead to the active exchange of GBP/USD which itself, had a profitable result on the economy. Experts expect the price to go up from 1.39 $ to 1.42$ which gives hopes for future economic growth, respectively.
