Sterling has started the week poorly, falling again due to ongoing concerns about next week’s referendum on EU membership. GBP/EUR has now fallen to €1.25, 7 cents lower than it was last month. The latest polls seem to give the ‘leave’ camp a lead, and this has weakened the Pound. The vote is now only 10 days away, and continued volatility is likely given the very tight nature of the opinion polls. It’s worth noting however that despite the polls being very close, the bookies still have the UK 74% on to remain within the EU. Here’s how GBP/EUR has moved this week:
As you can see, the Pound has been suffering due to the concerns and uncertainty a ‘Brexit’ would cause.
The coming week will be very important for exchange rates as the vote looms ever closer. We also have central bank meetings this week from the UK, USA and Japan. While no change in monetary policy is expected, there could be hints on future moves, particularly from the US Federal Reserve, so this could also affect exchange rates. It’s the referendum however that will continue to be the main driver for the currency markets, and I expect further volatility this week as further polls are released.
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