Today is a historic event for the UK and could change the course of history for both the UK and the EU. Results will be released tomorrow therefore expect the markets to be volatile today.

To keep up to date with exchange rates over this volatile period visit our live foreign exchange rates page.

What can we expect for the Pound today?

After many months of speculation, rumour and fact we are within 24 hours of knowing whether or not the UK will have chosen to Remain or Leave the European Union. Polling stations have been open since 7am this morning and will be open to 10pm this evening.

The race is a close as ever with most polls neck and neck. Sterling has been boosted by signs the Remain camp has clawed back some ground, Remain is still the bookmaker’s favourite.

It would however be a mistake to write off the Leave camp as last year in the General Election the pollsters got it wrong. According to the FT poll of polls (which looks at an average of the last few polls) there are 45% Leave, 44% Remain. That leaves 11% undecided and what is likely to settle the vote is how the undecided will vote. The way these undecided votes will swing is of course impossible to call but has been said the turnout and voting intentions of these voters could be determined by something as simple as the weather!

Today will see last blast attempts by the two sides to sway the undecided parties, as soon as we get notice of the exit polls I would suspect the pound to react. The actual result will not be known until very early Friday morning, let it be known that we will be open from 7 am tomorrow morning to manage any trades although don’t be surprised to see a very volatile market that could make trading conditions more tricky than usual.

How will the pound react to a Remain vote?

The pound is bound to strengthen on a Remain vote as financial markets breathe a sign of major relief. Potentially all of the last six months of uncertainty will be ‘unwound’ and the UK and the pound should be direct beneficiaries of inward investment.

Will it all be plain sailing? Absolutely not, this is the currency markets! Once the dust settles (and this could take a good couple of weeks) attention will return to the UK’s trade deficit and fears over just how much damage the Brexit uncertainty has done to confidence for the first half of this year.

Remain is just about favourite according to the bookmakers who are perceived to be the better guide to the outcome. If this is true then anyone buying the pound has a unique opportunity to purchase sterling on the current lows. Whilst the pound is much stronger today than last week it would be a real shame for anyone buying the pound to miss out on what is still a good level.

How will the pound react to a Leave vote?

The pound will not handle a Leave vote well, there is a strong likelihood the pound could slip by as much as 15% according to some reports. As Remain is the bookmakers favourite most Sterling exchange rates are reflecting an implied probability that Remain will win. Currently that probability is around 70%. This means that whilst a Remain vote would see Sterling rise, the bigger risk and surprise is of a Leave vote.

I would not rule out a move of 10% as we get any news of a Leave vote and I would expect lots of volatility as speculators try to find a bottom and seek to buy the currency. Friday could then see Sterling reacting to the headlines as we learn of fresh political developments. David Cameron has near staked his career on the Referendum outcome, could there be a vote of no confidence?

A ‘Leave’ vote could result in all manners of uncertainty on financial markets and it will be sterling that takes the brunt of dissatisfaction.

The outcome of tomorrows vote could heavily impact the cost of buying foreign currency and we therefore suggest you consider your options ahead of the results, call us today on 01494 725 353 or email me directly at jmw@currencies.co.uk for up-to-date news.

Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.