The Pound appears to be continuing its uptrend ahead of Thursday's vote with GBPEUR rates back in the 1.30 range. Will Sterling hold on to these levels over the next couple of days?
The Pound's value soared during yesterday’s trading, following an online Brexit poll released over the weekend. These were welcomed by those clients holding Sterling, who were becoming extremely concerned by the recent negative trend for the Pound. Sterling gained almost 2 cents against the EUR, USD & AUD and the key question now is whether this strength is sustainable and how much further can it rise?
Looking back over the past few weeks and we have seen the momentum shift from one side to the other. This uncertainty is only likely to increase in the build up to this Thursday’s vote and therefore I would be extremely tempted to protect my position ahead of it. The markets are reacting to rumours before facts and we could easily see another poll indicating the Leave camp are ahead again, and the gains we’ve seen over the past 24 hours could evaporate just as quickly.
I believe there are a number of factors that have caused the tide to turn in favour of the Remain camp, not least the Sunday Times and YouGov Poll. This indicated a narrow lead once again for the Remain camp, which has boosted market confidence and in turn the Pounds value has risen. Last week’s awful killing of respected MP Jo Cox, has also been attributed to a change in perception regarding the Leave campaign. Add to this Nigel Farage’s questionable immigration poster and we can start to understand why some people’s opinions may have started to alter.
Personally, I feel we are unlikely to see this trend continue over the coming days. This is not the first time the Pound has spiked and whilst the odds on a Remain vote have improved, I would be too nervous to leave any market positions open under such strenuous conditions.
With little economic data of note for the UK this week, I expect all eyes and market swings to come from pre-referendum opinions. With the Remain camp lining up a number of key figureheads to back their vote, the markets may be factoring in further good news but as mentioned previously after so much volatility and false dawns, every client should be considering their positions ahead of the biggest vote this country has had in the last 50 years.
Pound Sterling has made a u-turn this side of the Referendum and clients may be tempted to transfer currency whilst the opportunity is open. Call our trading floor on 01494 725 353 or email me here to receive a quote.
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