We monitor how the EU referendum and possible Brexit will influence exchange rates
With evidence mounting that the Remain camp is gaining advantage in the battle for the UK public’s allegiance ahead of the 23rd June vote we have noted the pound stage an impressive short-covering rally.
Research suggests that the potential impact on the value of pound sterling from a vote to leave the UK remains a concern for the UK public ahead of the June 23rd EU referendum.
The UK Treasury has revealed what they believe to be the “immediate economic impact of leaving the EU” which cites a negative shock to both jobs and the pound sterling exchange rate complex.
The GBP has cracked through an important barrier against the EUR on the back of news the Remain camp is pulling ahead in the EU referendum campaign.
The last two weeks have seen an apparent widening in poll results in favour of a Remain win, with polls more often showing a 10-point lead than not.
It is probably safe to say that the pound will lose even more ground, should the outcome of the EU-referendum be for UK to leave the union.
The British pound has not flinched against the euro on news that the Leave camp has no grown bigger than the Remain In camp with pollsters ICM.
The pound to euro exchange rate could fall back to levels last seen in 2011 over the course of coming months warns a leading international payments provider.
EUR/GBP may remain steady in April due to seasonal effects, however, Brexit inspired volatility could push the pair above 0.80 in the run up to the referendum.
Assuming Brexit risks to the British pound have now passed would be misguided argue analysts at Capital Economics.
The 23rd of March marked a milestone in that we are now three months away from the EU referendum. The countdown has begun.
Could a 'Scotxit' follow a Brexit?
The pound sterling has lost ground against the dollar thanks to Brexit fears and a heavy sell-off in the GBP-JPY cross.
Brexit will see the GBP fall, but worryingly for sterling bulls, even an In vote won’t save pound to dollar exchange rate from the 1.20s.
Sterling has had a very difficult time so far in 2016, with the EU referendum dominating national and international newswires.
The Bank of England has today announced that it will offer extra cash facilities to the UK’s banks around the time of the EU referendum.
A leading investment management company still see outstanding risk premia stemming from the uncertainty of the closely fought referendum campaign.
A higher risk premium across UK financial markets is likely to persist in the interim to June 23rd, with sterling most likely to be the lightning rod.
The pound could fall by as much as 15.0% in the event of a Brexit, but such a devaluation could help rather than hinder the recovery, according to economists Roger Bootle and Jonathon Loynes.
There is more Brexit uncertainty for sterling to absorb but it will eventually catapult higher once the referendum results in a win for ‘in’.
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