Pound Sterling Exchange Rate Forecast Uncertain on Mixed Brexit Fears

June 21, 2016 - Written by John Cameron

STORY LINK Pound Sterling Exchange Rate Forecast Uncertain on Mixed Brexit Fears

The Pound has been trending on a mixed-positive note today, owing to polling data alternately putting 'Leave' or 'Remain' in the lead.

Sterling has been high today, but not as high as yesterday, on account of polling stats making the outcome of the EU Referendum vote an uncertain prospect.

Markets More Confident that the UK Will Vote to Remain in the EU, Pound Sterling (GBP) Exchange Rates Climb

Support for the Pound Sterling (currency : GBP) soared during the early part of yesterday’s session as investors upped their forecasts that the United Kingdom will vote to remain part of the European Union on Thursday. The UK unit had slumped to as low as 1.2500 GBP EUR at the end of last week, but its resurgence on the session yesterday sent the Pound euro exchange rate Northwards to within a few pips of the 1.3000 GBP EUR threshold.

The Pound posted an even more convincing performance against the US Dollar, with the GBP USD exchange rate jumping by its largest intraday amount since 2009.

Meanwhile, the implied percentage chance that Britain will remain in the EU briefly jumped to 85% on the leading betting exchange Betfair (PPB.L) as investors priced-in opinion polls published over the weekend which pointed to a resurgence in support for the ‘Remain’ campaign.

Survation Poll Showed 'Remain' Support at 45% and 'Leave' at 42%

Of particular interest to analysts was a poll conducted by Survation and published in The Mail on Sunday, which put support for ‘Remain’ at 45%, while 42% of respondents stated their intention to vote ‘Leave’. The poll was conducted after the murder of UK Member of Parliament Jo Cox and sent out a contrasting message to another Survation poll for spread betting firm IG Index, released last Thursday, which painted a diametrically opposed picture of 45% / 42% in favour of ‘Leave’.

Kathleen Brooks, of Gain Capital explained that, ‘the pause in the campaign, (following Cox’s death), seems to have lent crucial support to team Remain. The markets have always been more comfortable with the UK remaining in the European Union.’ This sentiment was evidenced by a sharp move higher for London’s benchmark FTSE 100 share index of 3.04% - if the improvement in investor sentiment continues into today’s session, then further gains are forecast for the Pound Sterling.

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TAGS: Pound Dollar Forecasts Pound Euro Forecasts Pound Sterling Forecasts