The political system in the UK is quite complex. A person needs a lot of time to learn about the role of the monarchy in the country. It will be true to note that the king or queen plays a largely ceremonial role. Another point is the parliamentary system and its role in the state. There are many important details, but it will take a long time to mention all of them.
The most important issue for the UK and its partners is the impending Brexit. Great Britain plans to leave the European Union next month. Another question is whether this will happen in October or whether Brexit will again be “delayed”.
All these factors together create additional problems for forex brokers.
Forex Brokers and the British Pound
The risk of a failed Brexit has an impact on the forex markets. Some brokers try to minimize the damage from Brexit. They seek to limit their exposure to the extreme market volatility of the British pound. The fluctuations of pairs with GBP, among which the most vulnerable to volatility is the pair with the US dollar, are at the highest level. It is worth noting that this level shows maximum results from the beginning of the year. The level of volatility is still lower than it was before the referendum on UK membership in the EU.
Currently, brokers are trying to find the best solution. Retail traders in Europe have already changed leverage. At the moment, leverage was quite low at 30:1 by the end of August. However, these changes will have a greater impact on professional traders.
Prime Minister Boris Johnson is facing stiff opposition. The House of Commons on September 4 voted to take control of the Brexit process. 388 deputies voted for this bill, while 301 deputies spoke out against this decision.
By adopting the bill, the House of Commons emphasized that the current state of affairs did not suit them. This means that forex brokers should be more careful when working with the British pound.