British Pound Sterling Currency Forecast vs EUR USD CAD - Referendum Nears, Drama Likely for GBP

June 21, 2016 - Written by Minesh Chaudhari

STORY LINK British Pound Sterling Currency Forecast vs EUR USD CAD - Referendum Nears, Drama Likely for GBP

The near-future may see some dramatic movements for the Pound, as voting for the EU Referendum gets underway in a short space of time.

Pound rates have been supportive recently, although the latest polls have made the odds of a 'Brexit' just as likely as an 'In' vote being dominant.

Pound Sterling (GBP) Exchange Rate Outlook Neutral to Positive

The POUND STERLING (currency : GBP) was the star of the show in the global currency markets yesterday, gaining over 2.0% against many of the other sixteen most actively traded global currencies. Investors’ perceptions that a Brexit is now less likely following a series of weekend opinion polls helped Sterling.

However, the latest Rightmove House Price survey, which showed a sharp drop off in the annualised pace of British property price increases to 5.5% was less good news.

Nevertheless the outlook for the pound is now NEUTRAL TO POSITIVE.

Euro (EUR) Exchange Rate Outlook Neutral

The EURO (currency : EUR) sank against Sterling yesterday, but held steady against the US Dollar. Increased confidence from market participants that Thursday’s UK European Union membership referendum will go the way of the ‘Remain’ campaign was positive news for the shared currency, given that analysts suggest that a Brexit might hasten the end of the ‘European Project’.

A decent showing from this morning’s German ZEW Confidence Survey will further favour the shared currency, which is now forecast to trade with a NEUTRAL bias moving forward.

The GBP EUR exchange rate stands at 1.2998.

US Dollar (USD) Exchange Rate Outlook Neutral to Positive

A quiet data day for the US DOLLAR (currency : USD) yesterday made for a day of drift. There are no tier one data releases due out of the States, so trading for the Buck is forecast to be driven by investors’ interest rate expectations.

Futures markets now price-in an almost 12% chance of a Federal Reserve interest rate hike next month and an over 30% chance that the next round of policy tightening will take place in September.

These relatively go-ahead forecasts will support the Greenback moving forward and it is expected to trade on a NEUTRAL TO POSITIVE footing in the short term; the GBP USD exchange rate sits at 1.4681.

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