Raging problems are crushing Dover the White Cliff

London city is the most attractive place for the Forex traders in the world gathering the most successful traders and a great amount of capital. However, the Brexit and pandemic consequences stress the exchange rate of the GBP.

The process of Brexit has undergone three shuffles in the cabinet from the PM David Cameron to Boris Johnson. The most fanatically Brexity people in the UK are looking for crushing outbreaks up with Brexit even under a no-deal agreement. If that is the outcome, it is a nightmare for the many besides a dream for them. The anti-Euro sentiment can be found among Brextremists of the public. If the worst-case scenario happens it will hurt UK economy badly and make the trade relationship between the UK and the EU back to the 1800s. In this case, animal husbandry will face 40% to 100% tariffs, which will instantly put many farmers out of business. For the car manufacturers, more entities suffer a 10% export duty, which will harm the overall revenue of these companies. So the huge waves of commerce recession would drag the UK down to the ground and GBP against other currencies decreases as expected. In the Forex market, GBP is sensitive to the bad news revealed from the No.10 Downing Street. The fear of no-deal Brexit is the fear of national debt soaring. Basically, the demand side is tightened certainly when national debt outpaces the overall economic growth.

On the other hand, Covid-19 affects almost every aspect of our lives forever even after a successful vaccine invention. But so far the close attention should be paid to the test and track system. Moreover, the performance of GBP is also actually bonded with the efficiency of tracking and testing policy. In the history of the public biological event, the wild-spread pandemic threat is never eliminated quickly. Today cholera still pose the threat to public health care but it doesnt inspire any public fears as bad as it did in the 1980s. Due to the effectiveness of the test and track system, the public believes that they are still safe as long as the infection is under control. So the Forex market prefers the currencies of the countries where the effective tracking and testing policy is well applied. Under the impact of increasing coronavirus cases, it is helpful to short the GBP when no-deal Brexit news is released from the No.10 or long the currency when the effectiveness is improved in testing and tracking system.