Pound Sterling (GBP) Forecast Moved by Brexit Opinion Polls

Modified: Friday, 19 February 2016 16:49 BST - Written by John Cameron

STORY LINK Pound Sterling (GBP) Forecast Moved by Brexit Opinion Polls

Pound Sterling (GBP) Declined against High-Yielding Commodity Dollars Yesterday

The Pound Sterling (currency : GBP) put in another lacklustre performance in the global currency markets yesterday. The UK unit incurred its heaviest losses against the high-yielding Commodity Dollars, (AUD, NZD, CAD) thanks to a pronounced bounce for commodity prices and share markets.

The decidedly ‘risk on’ trading environment was evidenced by a surge for equities on the day which saw London’s headline FTSE 100 index record a gain of some 2.87%. Paris’ Cac 40 and Frankfurt’s Dax mirrored this forward move and the broad-ranging S&P 500 in Chicago, considered by many to be the benchmark global share index, instantly posted gains of almost 2.0% when it re-opened for business yesterday afternoon.

EU Referendum Uncertainty Continues to Weigh on Pound Sterling (GBP) Exchange Rates

The Pound’s performance has been hampered in recent weeks by nagging fears that UK voters may be on the verge of deciding to leave the European Union, with the uncertainty over the impact of doing so weighing heavily. Economists estimate that such a move would knock between 10% and 15% off Britain’s annual Gross Domestic Product in an instant. Meanwhile, leading investment bank Goldman Sachs, issued a report earlier in the month predicting that the Pound would weaken across the board by 20% if a ‘Brexit’ took place.

However, many analysts are now suggesting that fears that the UK will vote to exit the European Union are being overdone and this week’s opinion polls back up their hypothesis.

The latest Ipsos MORI poll, which was conducted over the telephone between 13th – 16th February, showed that a whopping 55% of those surveyed would be voting in favour to remain in the EU, with only 36% voting to leave. The poll found that only 9% of those questioned were yet to make up their minds.

Meanwhile, this week’s ComRes poll, also conducted over the phone, came up with a similar, if slightly less resounding forecast, with the ‘remains’ totalling 49%, the ‘leaves’ coming in at 41% and the ‘don’t knows’ at 10%. Another poll, this one by TNS, has found that 36% of Britons intend to vote to leave, while 34% will vote to stay. The age of those polled is also an important factor, as younger people tend to support the EU whereas older people often oppose it.

Given the state of the opinion polls, it would appear highly likely that Prime Minister David Cameron will attempt to get the referendum staged at the soonest possible juncture; political analysts predict that 23rd June is now the most likely date. If this is selected as ‘D-Day’ and the polls continue to point to a clear win for the ‘remain’ campaign, then the Pound Sterling’s performance is forecast to improve before Summer starts in earnest.

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TAGS: Pound Sterling Forecasts