With Brexit becoming reality investors focus on US. The Brexit news had been much awaited in the world corporate scenario and indeed, in the weeks following up to the opinion polls, the world economic scenario had been uncertain and future investment decisions were put on hold in many cases. As it has been a week since the decision was announced, the European Union has become busy with several meetings being held by policy makers and business leaders as to work on consequent policies and norms that would come into place in the European Union as a result of this decision. The overall impact is a slowdown of the economy following Brexit which has to be countered with the right measures.
There had been uncertainty in the global markets as this decision was pending, but Brexit has definitely nailed all hopes to the ground. The European markets were hoping to surge back to Britain chooses to remain with the European Union, but that did not turn out to be. The negative impact on the financial sector is palpable. The Bank of England has hinted that the bank rates would be lowered to counter the adverse impact on the economy that would be felt this summer. Hence, an interest cuts as much as 85% is expected to come in the month of November. All trading sectors have their eyes on currency pairs like USD/GBP and EUR/GBP in order to understand the impact of this decision that is being felt in the forex trading scenario. Check Out this article on Bremain Affects Trading Markets.
Traders change focus
In general the traders are not changing their focus of US with the current scenario yet to settle in Britain or in Europe. The jobs data that has been recently published in US shows that the US industries are looking up and it has strengthened since the Brexit referendum has been announced. Investors are now looking to move to the safety of the dollar from the turbulent and uncertain European market. There is much hope been generated from the jobs data published in the US. The non farm payrolls are not encouraging, but show slow growth. Hence, it is too early to predict that there would be a rise in the US job sector immediately, but it is definitely a more steady market to look at for investing purposes than the European market. Gold has been a beneficiary at this time as the Brexit decision was announced and realized. It has reached a high mark and will sustain the position at current times.
As for the US economy, markets are withstanding volatility as of now. The industrial average’s show slow growth and dips that is not alarming. As per the domestic economic performance, the consumer spending has been slow but steady. It signifies about two thirds of spending in the US economy and hence, caution needs to be taken if one is planning to invest aggressively in this sector.