Currency NEWS FLASH : EU Referendum - Black Friday - UK Votes For Brexit and Pound Sterling (GBP) Outlook Plunges

June 24, 2016 - Written by John Cameron

STORY LINK Currency NEWS FLASH : EU Referendum - Black Friday - UK Votes For Brexit and Pound Sterling (GBP) Outlook Plunges

The Pound has remained undesirable to investors today, having been cast in a highly negative light on account of the earlier 'Out' vote.

UK Votes to Brexit, Near-Term General Election Likely

With almost all of the votes in yesterday’s UK European Union membership referendum counted, it has been confirmed that the UK electorate have voted to ‘Leave’ the European Union.

Every major British political party had supported a ‘Remain’ vote, but the pro-‘Brexit’ campaign won the day by a clear margin of 52% / 48%. The BBC called the result in favour of ‘Leave’ at 0440hrs BST time this morning.

Political analysts now expect the UK to invoke Article 50 of the European Union’s Lisbon Treaty and begin negotiations to extricate Britain from its current agreements with the other EU member states.

Who will lead these negotiations on behalf of Britain is unclear, but it appears highly unlikely that it will be current Prime Minister David Cameron, while a near-term UK General Election is now considered a distinct possibility.

GBP USD Exchange Rate Plunges to Lowest Level since 1985

In the currency markets, the Pound Sterling (currency : GBP) has plunged to its lowest level against the US Dollar (currency : USD) since 1985.

The GBP USD exchange rate currently trades at 1.3340 and analysts forecast that the safe haven Buck will enjoy further support as the day progresses as international investors seek out safe haven assets.

Meanwhile the Pound Sterling euro exchange rate was trading down to close to the 1.2000 GBP EUR threshold in the immediate lead-up to the opening bell in London’s share markets.

Elsewhere, Asian equity markets have rocketed lower following the result, with Tokyo’s benchmark Nikkei 225 trading down by the best part of 10% by the middle part of the overnight session and this scramble to shift out of risk-laden assets curbed the Pound’s losses against the high-yielding Commodity Dollars.

The Pound Australian Dollar exchange rate was trading down in the low 1.8000s GBP AUD as of 0600hrs UK time this morning – down by over 10c in comparison with last night, while the Pound New Zealand Dollar exchange rate shoed similar losses, sending GBP NZD down into the low 1.9000s.

Further downside is forecast for the Pound Sterling during coming sessions; legendary currency trade George Soros predicted earlier last week that that the Pound would lose in excess of 15% of its value across the board in the event of a vote for Brexit and forecasted that, in such an event, today would go down in history as ‘Black Friday’ in the markets.

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TAGS: Pound Sterling Forecasts