The trading world is extremely dynamic and is often affected by major political or economic events in the world. Major international treaties, government initiatives or even political shifts leave their impact on the trading world.
One such event was the recent exit of Britain from the European Union. Popularly termed as “Brexit,” the event radically changed the economic sphere of the United Kingdom including its businesses and trading establishments.
Trading schools across the country cover Brexit in detail along with its repercussions for traders in the UK and the rest of the world. Read ahead to explore why Brexit was an important event for the UK trading industry.
What was the Brexit all about?
The UK government held a public referendum on 23rd June 2016, to allow the public to decide whether the UK should remain a member of the European Union (EU). The UK electorate voted to leave the EU’s single market and customs union.
Although the UK formally left the EU in January 2020, the transition period recently ended in December 2020.
According to the regulations of the new trade deal under Brexit, the UK has a separate VAT system. The deal also ensures that 100% of the trade between Britain and the EU receives preferential treatment and does not come under quota rules.
What is the expected impact of Brexit on the trading markets?
At the time of its happening, Brexit had sent shockwaves throughout the trading markets in the European Union, especially those dealing with the British Pound Sterling. The event caught forex and commodities traders in a fix as they sought to recover the costs of their assets based on the assumption of the Brexit referendum.
The immediate effect was a 10% fall in the value of the British Pound Sterling. The free import and export of goods to and from EU countries were restricted which in turn affected the commodities trade markets.
The one good thing that has come out of Brexit is the imposition of tariffs on certain imported goods. This has benefited the customs brokers in the UK who can now charge higher rates.
How can you safeguard yourself from such unexpected events in the future?
While you cannot predict major global events and their impact on international trading markets, you can bank on historical data and make calculated assumptions. However, doing this would require you to gain extensive expertise on the ups and downs as well as the factors dominating international markets.
You will also require sufficient knowledge of trading concepts and techniques which can allow you to make calculated guesses that can increase your revenue.
General or forex trading courses can introduce you to the complexities of modern-day commodities trading and help you cover a lot of ground in a short time. Invest in an appropriate trading college programme that can establish your trading career successfully.