Are the days of a strong British pound over? Her majesty’s currency at the beginning of this century was one of the strongest among the big ones and more recently, at the time of the financial crisis it was worth slightly less than double against the USD and more than 50% of the Euro, than it is today. However, with Brexit and mainly against the single currency, the British pound lost its shine again, but contrary to what many predicted, there was no debacle and did not even reach historic lows, being now in a zone of lateralization, roughly halfway between the lows and the year highs.
Is the British pound in the calm before the storm? In a year where, in principle, the Brexit issue should be resolved with an agreement or not with the European Union? It is too early to gauge the strength that the currency will have in the medium to long term, not least because the COVID crisis came to further undermine the visibility of the UK’s economic strength outside the European Union, however it will almost certainly be more times of adventure and volatility for a currency that lost some of its relevance on the world stage when the Euro entered. In the long term, its movement could be the catalyst for further European integration, if the separation from the European bloc proves to be a disaster, but on the other hand, if the outcome is a success, it could lead to further disbandment of the European Union.
