The Pound continues to rally against the US Dollar and Euro as market confidence in a remain vote grows. The next 24 hours may still be a volatile period as we approach the EU Referendum, you can always view live exchange rates here.
The Pound has appreciated by 4.75% in the last three days vs. the USD, with only one three-day period bettering this since the Plaza Accord (when the world’s major governments agreed to weaken the US Dollar in relation to the Japanese Yen and Deutsche Mark by intervening the currency markets) in 1985. During yesterday’s trading session, Sterling hit its highest point against Euro since the beginning of the month, as market sentiment since the weekend had put the Remain camp slightly in the lead.
However, ‘What UK Thinks’ Poll of Polls, which takes the average of the most recent 6 polls, is currently split straight down the middle at 50/50. Here at Currencies.co.uk we have been running a poll of our own for website visitors, and this currently shows the Remain camp at 54% and the Leave camp at 44%, with 3% undecided. However, Bookmaker’s odds may provide a clearer idea of sentiment, due to actual money being at stake, and Ladbrokes have cut their odds to 1/4 in favour of remaining in the EU and 3/1 for a Brexit.
David Cameron made a last minute appeal to voters yesterday afternoon when he spoke outside Number 10 to warn once again of the implications of leaving the EU. He claimed that ‘Brit’s don’t quit’, and that this decision was vital for their children, grandchildren and future generations, in an attempt to encourage older voters with concerns around the EU to vote to remain.
Currency Speculator George Soros warned yesterday that a leave vote would cause the Pound to plummet, creating a bigger disruption than experienced on Black Wednesday in 1992. Soros made his fortune betting against the currency when the British government was forced to withdraw the Pound from the European Exchange Rate Mechanism after it was unable to keep the currency above its lower limit.
The Office of National Statistics released their Public Sector Net Borrowing figures for May at £9.7billion, which was down by £0.4billion from May last year and the lowest May reading since 2007, but was still higher than had been anticipated by economists. This may have contributed to Sterling’s upwards spike yesterday, however the main catalyst for exchange rate fluctuations for the foreseeable future is likely to be from the EU Referendum.
As we go to votes tomorrow, the result really is on a knife edge and could very easily go either way. With this in mind, I would strongly advise putting a plan in place for any short to medium term currency requirements with your Account Manager here at currencies.co.uk.
With the EU Referendum tomorrow, you may want to take advantage of the current Pound strength, speak to one of our brokers today on 01494 725 353 or email me here.
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