Brits buying US dollar in advance of no-deal Brexit

Brits are buying up US dollars in advance of a hard or no-deal Brexit scenario leading to a plunge in sterling.

According to financial advisory group deVere Group, the US dollar sold off at the start of the week to a two-year low which was proving a good opportunity for Brits.

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The currency was being weighted by concerns about a Federal Reserve policy meeting, the strength of the US economic recovery, the COVID-19 pandemic and tensions between the US and China.

For Brits, they were concerned about the Government successfully managing to negotiate a deal with the European Union by the 31 December, 2020 deadline.

A low pound would be bad news for Brits living overseas such as Australia, though, who received a pension or other income in sterling.

DeVere chief executive, Nigel Green, said: “Whilst the ‘greenback’ – a robust safe-haven asset in times of turbulence – is down, quite sensibly Brits are moving in to buy it as a considerable drop in sterling can be expected if the UK crashes out of the EU in December without a deal.

“A low pound will help to slash Britons’ purchasing power and lead to a drop in UK living standards. Weaker sterling means imports are more expensive, with rising costs being passed on to consumers.

“Against the current backdrop of a continuing COVID-19 spread in the U.S. putting at risk the country’s economic recovery, plus the massive EU fiscal deal, it is likely that the dollar will remain under considerable pressure for some time.”

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