Friday, June 24, 2016

What Does The Pound Falling Mean?

Money makes the world go round!

The US Federal Reserve decided to raise interest rates last year, pushing up the dollar.  Many investors thought that the Bank of England would do the same to secure the pound but there has been a period of weaker growth, causing investors to reassess the UK outlook.

US markets are also dropping following the news of the United Kingdom's exit from the EU.  Walmart is the only stock that is gaining on the Dow Jones.

What Does The Pound Falling Mean?
What Does The Pound Falling Mean?

Following the United Kingdom's referendum vote to leave the EU, the pound fell to levels that have not been seen sine the 1980s.  The fall began overnight as the results of the referendum became clear.  At one point, it dropped to $1.3236, a decrease of more than 10%.

This matters to you because of the impact it has on the global economy.  Global markets have buckled as the value of the pound decreased to its lowest point in over 30 years.  The value of the pound has been decreasing since the start of 2016.  After the first month of 2016, the value decreased about 4%.

The decreased makes it the worst performing major currency.  Many investors are looking to gold as a safe haven, considering the fact that the pound is at its lowest point in more than three decades.

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