Brexit Less Likely : Pound Sterling (GBP) Forecast Deteriorates Considerably

May 25, 2016 - Written by Ben Hughes

STORY LINK Brexit Less Likely : Pound Sterling (GBP) Forecast Deteriorates Considerably

The Pound has proven a victim of the winds of change today, having crashed against the board due to earlier weak GDP printings.

While earlier polling data painted a more mixed picture, the Pound has nonetheless been able to appreciate heavily against rivals due to the 'Remain' campaign directly challenging their 'Leave' competitors over economic forecasts.

Easing 'Brexit' Fears caused Pound Sterling (GBP) Exchange Rates to Rally

The Pound Sterling (currency : GBP) was the undoubted start of the show during yesterday’s session in the global currency markets. The UK unit enjoyed its best day for several months as investors moved to rapidly factor-in an increased percentage chance that the UK will be remaining in the European Union after next month’s In / Out referendum.

However, the trading day did not pass off without controversy for the UK unit; Bank of England (BoE) Governor Mark Carney was in the House of Commons for one of his regular appearances before the Treasury Select Committee and he was once again forced to vehemently defend his Bank’s recent comments on Brexit.

The BoE Supremo was accused by MPs of compromising the Old Lady of Threadneedle Street’s political neutrality following its dire warnings of the effect that a vote to ‘Leave’ the European Union would have on the Pound and the UK economy. Carney noted that he and his monetary policy committee, ‘have a responsibility to discharge our remit and we have a wider responsibility to the British people, who don't want risks kept from them.’

He then went on to defend the BoE’s policy path since he took the reins, stating that, ‘we have made it more likely that we will bring inflation back to target, whatever the outcome of the referendum, sooner and more sustainably, and that will be a better economic outcome,’ before spikily suggesting that, ‘to suggest otherwise is to try to undermine that.’

US Dollar (USD) Exchange Rates Advanced on Positive Domestic Data

Elsewhere, there was positive news for the US Dollar (currency : USD) yesterday afternoon, with the publication of a go-ahead set of American Housing Sector stats.

The month-on-month New Home Sales data for April thrashed analysts’ expectations of a 2.0% result to show at 16.6%.

FX insiders forecast that there is now an increased chance that the US Federal Reserve will hike its headline interest arte next month.

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TAGS: American Dollar Forecasts Pound Sterling Forecasts