UK expats urged to guard against volatile pound

Published:  15 Nov at 6 PM
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As the Brexit scenario becomes even more confusing and unpredictable, UK expats overseas as well as sterling investors are being urged to take precautions against currency volatility.

As the wrangling in the British parliament increases and calls for a second referendum grow louder, the pound sterling is weakening by the day. At the beginning of the week, the pound fell to $1.286 against the US currency and €1.12 against the euro. More falls are expected as it becomes obvious that Theresa May is unlikely to get lawmakers’ support for her vision of a Brexit deal before the Brussels summit later this month.

Monday’s sterling lows came after the currency’s battering last Friday following the resignation of transport minister Jo Johnson, who’s now in full favour of a second, more informed referendum and strongly against May’s proposals. Financial professionals are now in unison over the fate of sterling as they feel it’s due for a rollercoaster ride over the next several months. Brexit’s final outcome will result in either its further collapse or a sudden surge in value, but everything is now on hold with no specific outcome priced in.

British expats living all across the world have been caught in the pound’s volatility, with those worst effected living on the British state pension whether frozen or not. Further falls will result in even more belt-tightening, especially amongst the elderly who’d hoped for an uneventful retirement in the sun. Investors will also be hard hit, with those with a broad spread across sectors, regions and asset classes advised to sit tight as Brexit is still mired in uncertainty, making strong bets on a currency, asset class or region inadvisable at the present time.
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