Six years after the Brexit vote, there is little sign of the 'Global Britain' voters were promised. Declaring sterling an emerging-market currency suits the country’s fondness for declinism
Save time by listening to our audio articles as you multitaskIt is not that the pound has suddenly turned into the Turkish lira or the Argentine peso. It remains part of the5 group of heavily traded currencies, alongside the dollar, the euro, the Japanese yen and the Swiss franc. Yet it has proved more vulnerable to crises than the others.
A “flash crash” in October 2016 took its value from $1.26 to $1.14 in less than a minute. As covid-induced panic gripped markets in March 2020, it dropped by 12% against the dollar in the space of a fortnight . When British petrol pumps ran dry last September, it plunged again and traders’ expectations of its future volatility soared.
In fact it is a means to less grand aims: speculation and cross-border investment. People trade sterling to take a punt on its value, or because they are buying or selling British assets. In this it has more in common with another rich-world currency. Like sterling, the Australian dollar is issued by an open, developed economy that relies heavily on trade.
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