- Pound Still Rising Against Majors Today – More ‘Remain’ support has led to GBP/USD exchange rate gains.
- David Beckham, Other Public Figures Come out in Support of Brexit – Pop culture icons have an ability to move sentiment in a way that plain facts cannot.
- US Dollar Weakens as Brexit Doubts Abate in Light of Recent Support – Risk-on market sentiment points investors to more lucrative currencies.
- GBP/USD Forecast Hard to Predict in the Face of the Referendum – Market upheaval likely until result is known.
The Pound US Dollar GBP/USD exchange rate has seen it strongest levels since before the announcement of the UK’s EU referendum date, released back in February.
This is almost wholly due to the massive swing toward the ‘Remain’ movement following the aftermath of last Thursday’s tragic events. Campaigns were suspended over the weekend as a mark of respect for the late Labour MP and humanitarian Jo Cox and the brief respite allowed the less vocal ‘Remain’ movement to take advantage of some already mounting support in the absence of the ‘Leave’ campaign.
Against the US Dollar, the Pound soared three cents yesterday and today has already seen another one cent rise.
Currently the GBP USD exchange rate sits at 1.4762, up 0.61% since the start of Tuesday’s session.
Pound (GBP) Gains Levelling but Currency Still Rising amidst Increasing Remain Support
Although it appears to be levelling out somewhat, the Pound continues to climb today as a host of influential business leaders and economists voice their support for the UK staying in the EU.
The heads of Jaguar, Land Rover and Vauxhall, among others, have all come out in favour of remaining. Ten top Nobel Prize winning economists moved to support the UK’s ‘Remain’ campaign as well, in a move that may sway some voters unconvinced by politicians’ economic claims.
Pop culture icons have gotten involved now as well with the likes of David Beckham coming out in favour of remaining. He had this to say:
‘I played my best years at my boyhood club, Manchester United… we were a better and more successful team because of a Danish goalkeeper, Peter Schmeichel, the leadership of an Irishman Roy Keane and the skill of a Frenchman in Eric Cantona.
I was also privileged to play and live in Madrid, Milan and Paris with teammates from all around Europe and the world …
We live in a vibrant and connected world where together as a people we are strong. For our children and their children we should be facing the problems of the world together and not alone. For these reasons I am voting to Remain.’
With fresh news that British banks refrained from looting as much as possible from the extra-liquidity auctions, it seems that the ‘Remain’ camp has been gaining even more support than thought.
US Dollar (USD) Wounded as Risk Aversion Lifts with Lessening Brexit Concerns
Harkening back to the US-Japanese trade dispute of the 1990s, which saw the Dollar plunge against the Yen, traders are fleeing the US safe-haven in the five months running up to the US Presidential election as both candidates have stated they will alter US trade policy if they get into office.
An air of risk-on attitudes permeates the markets as ‘Brexit’ uncertainty has cooled to some degree. This has also led to traders shying away from the safe US Dollar in favour of higher-yielding but riskier currencies.
Ecostats Offer Little Support with UK EU Referendum just Two Days Away
As much as it has been repeated; Investors, bankers, trader and analysts will all be watching the end of the week with bated breath as the dreaded referendum rears its influential head.
The vote is just two days away. Figure heads in the UK vocalising on either side of the debate will continue to draw attention from certain voters and turn away others.
Although both sides of the debate have attempted to sway the public with their economic assessments of the UK’s future within and outside of the EU, immigration and sovereignty continue to be the main concerns for the voting public.
When it comes to ecostats and influential monetary announcements, it may be all but pointless to discuss the UK’s as the only real impactor for the Pound will be the sentiment surrounding the referendum and ultimately the result of the vote on Friday morning.
The US has a little more data to work with but is still fairly thin on the ground. Federal Reserve Chairwoman Janet Yellen is set to testify to the Senate Banking Panel tomorrow so look out for swings in the US Dollar in regards to a dovish or hawkish attitude from Yellen and the central bank.
US manufacturing PMI is due for release on Thursday but chances are it shall be drowned out by the on-going referendum. However, US durable goods orders could hold some weight as an increase typically signifies a great swelling of consumer confidence due to the nature of said goods.
All in all the main market mover this week will of course be Thursday’s referendum, so all eyes will be watching. Once the referendum is out of the way, the market may stabilise – but the degree of stability largely depends on the result.
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