- Pound Sterling (GBP) Exchange Rates Surge – Latest EU Referendum opinion polls suggest ‘Remain’ will be victorious
- Australian Dollar (AUD) Exchange Rates Advance – Risk-on trade causes ‘Aussie’ (AUD) to rally
- GBP AUD Exchange Rate Forecast to Fluctuate on EU Referendum Uncertainty – Market sentiment predicted to shift
- Domestic Data Predicted to Have a Muted Impact – Brexit debate to drive currency movement this week
Domestic data is predicted to have a comparatively muted impact on exchange rates as we draw ever closer to Thursday’s EU referendum..
In particular, GBP exchange rates will see movement dominated by any EU referendum developments.
Similarly, risk-correlated assets such as the ‘Aussie’ will likely endure volatility in response to shifting market sentiment rather than data results.
Pound Sterling (GBP) Exchange Rates Surge as ‘Brexit’ Odds Cool
As mentioned above, domestic data is expected to have a muted impact this week with trader focus dominated by news regarding the EU referendum.
With that in mind, it shouldn’t come as much of a surprise that GBP advanced across the board despite that fact that annual Rightmove House Prices dropped from 7.8% to 5.5% in June.
Rightmove director and housing market analyst Miles Shipside said; ‘We’ve become accustomed to prices rising in London and now that the pace of rises has slackened it’s easy to forget that the price of property coming to market is still £228,632 higher than it was six years ago. Buyers either have physical limits to what they can afford or mental limits to what they are prepared to pay, and this month Londoners are at odds with the rest of the country.’
Sterling’s appreciation can be linked to the latest set of EU referendum opinion polls that indicate Britain will vote to remain in the EU on June 23rd.
‘Weekend polls suggested the tragic death of Jo Cox may be shifting some support back to “Remain” — that has helped risk sentiment a bit,’ said Robert Rennie of Westpac Banking Corp. in Sydney. ‘The polls are also driving the move away from safe-haven currencies.’
Australian Dollar (AUD) Exchange Rates Advance on Improved Risk-Appetite
With the exception of the British Pound, the Australian Dollar held gains versus its major peers in the early stages of Monday’s European session.
As mentioned previously, the ‘Aussie’ rally can be linked to improved market sentiment with bets of a UK Brexit easing in line with favourable opinion polls.
‘The markets have always been more comfortable with the UK remaining in the European Union, hence the boost to risk sentiment now that the ‘Remain’ camp’s campaign appears to be back on track,’ stated London-based research director Kathleen Brooks.
Global equity markets halted a sustained depreciation and commodity prices advanced on Monday morning, further boosting the appeal of the risk-correlated Australian Dollar.
With a complete absence of domestic data to provoke changes, there is a high chance that the ‘Aussie’ will hold gains versus most of its major peers for the remainder of Monday’s trade.
GBP AUD Exchange Rate Forecast: Significant Volatility Predicted on EU Referendum Uncertainty
Given the significance of the UK’s EU referendum vote and its far-reaching consequences, GBP AUD exchange rate movement will be at the mercy of market sentiment in the run-up to the vote.
There is a high chance that the exchange rate will see massive price swings with traders set to be highly reactionary to any EU referendum developments.
Domestic data is unlikely to feature heavily for the Pound or the Australian Dollar this week with risk-appetite far more likely to drive changes.
If the UK votes to leave the EU on Thursday, both the Pound and the ‘Aussie’ could see massive losses as traders flock to less risky assets.
Conversely, a vote to remain could see both currencies surge exponentially.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending within the range of 1.9535 to 1.9652 during Monday’s European session.
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