Pound Sterling Euro and Pound Dollar Exchange Rates Low on Crashed Government Site

June 7, 2016 - Written by Minesh Chaudhari

STORY LINK Pound Sterling Euro and Pound Dollar Exchange Rates Low on Crashed Government Site

The Pound has made significant losses against peers of late, potentially due to the EU Referendum voting rush crashing the Government's dedicated site.

In a stark reversal, the Pound has risen in appeal by a large amount due to polls pointing towards an 'In' vote.

Pro-Brexit Opinion Polls cause Pound Sterling (GBP) Exchange Rates to Decline

The past seven days has brought major price action for the world’s leading currency pairs; the Pound Sterling euro exchange rate briefly traded up to above the 1.3200 GBP EUR threshold at the start of last week.

However, the intervening period has seen the pair heavily down sold, following the publication of a series of opinion polls pointing to a resurgence in support for the pro-Brexit ‘Leave’ campaign in this month’s UK EU In / Out Referendum.

The latest YouGov poll, published yesterday, saw 3,405 respondents put ‘Leave’ ahead by 45% to 41%, with the remainder undecided. The poll, while far from clear-cut, built on Sterling-holders fears of last week that the ‘Remain’ campaign is now losing momentum.

However, in spite of the apparent move in favour of ‘Leave’, futures markets still price-in a well over 70% chance that the UK will vote for the status quo and remain part of the European Union.

Admittedly, this is down from the 80%+ reading which we saw ten days ago, but it is still a strong enough implied percentage chance for many analysts to suggest that the Pound is now oversold in the markets.

The next key level to watch for heading lower in for GBP EUR is May 4th’s 1.2583. Consecutive closes below this level will then bring 7th April’s multi-year nadir of 1.2319 firmly into play for Europe’s premier currency pair.

GBP/USD Exchange Rate Tumbles despite Reduced Fed Rate Hike Bets

Elsewhere, and for the same reason, Sterling has given up a significant amount of ground against the US Dollar on the day, with the GBP USD exchange rate trading down into the middle part of the 1.4300 – 1.4400 trading range.

However, losses for the pair were tempered by last Friday’s dire US jobs data which caused investors to shift back their expectations regarding the date of the next Federal Reserve interest rate increase.

Futures markets now price in a 51.6% likelihood that the headline cost of borrowing Stateside will still be at its current level of 0.50% after the Fed’s September 21st policy announcement.

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