- UK currency in demand as voting week begins – Previous week’s events likely triggered polling parity
- Euro strong overall on German data – Forecast-beating results strengthen single currency
- US Dollar dives overall after gloomy predictions – Forecasts of shock waves after ‘Brexit’
- Eurozone construction stats incoming – UK borrowing data due early tomorrow
Pound (GBP) Extends Gains Vs Euro (EUR) & US Dollar (USD) Today
After staging an impressive and broad-based rally against its major currency counterparts on Monday, the Pound (GBP) extended gains against both the Euro (EUR) and US Dollar (USD) on Tuesday thanks to continued support for the UK’s remain campaign.
Unless sentiment shifts dramatically, GBP could remain trending higher as the vote approaches. Support from the Remain campaign appeared to come from all sides on Tuesday, with popular footballer David Beckham giving his endorsement to a vote to stay part of the EU.
The Pound Euro exchange rate achieved a high of 1.3061 while the Pound US Dollar exchange rate briefly rallied to 1.4784.
Wednesday saw fewer positive shifts for the Pound, with the British currency struggling to further its advance this close to the vote.
(Previously updated 20/06/2016)
The Pound has begun the week of the EU Referendum vote on a rolling start, having rallied strongly against the Euro and US Dollar, along with most other peers.
Although GBP slumped dramatically last week on the back of rising ‘Leave’ support, the suspension of campaigning for three days and the tragic murder of MP Jo Cox has resulted in a reversal in sentiment and a dramatic shift in the Pound’s fortunes.
While the GBP EUR exchange rate stormed to a high of 1.2938 over the course of the European session, the GBP USD exchange rate jumped 2% to hit a high of 1.4673 as trading progressed.
With the vote now only days away, this uptick in support for the ‘Remain’ campaign could mark the beginning of the end of Sterling volatility. That being said, with some key television debates still to come, sentiment could still shift dramatically before the UK goes to the polls.
The Euro has been a relatively strong option overall, thanks to a trio of supportive Eurozone data releases.
The US Dollar has been the least desirable of the three currencies, having opened the week on a low note due to economist concerns over what the consequences of the EU Referendum could be further afield than the UK.
UK Economic News: Pound Rallies after Resurgence in Support for an ‘In’ Vote
The polls have once again been responsible for the latest shift in the value of the Pound, this time in a strong upwards direction. Against the Euro (GBP/EUR), the Pound has risen by 1.1%, while a greater 1.7% advance has been recorded against the US Dollar (GBP/USD). As of writing, the Pound was positive in all of its pairings, with the best gains being of more than 2.1% against the Indian Rupee (GBP/INR) and the Japanese Yen (GBP/JPY).
The latest support for Sterling has come from the ever-influential polls, which have put the ‘Remain’ campaign back into a dominant position, or at the very least neck and neck with the ‘Leave’ side in percentages. These stats came on Sunday; the first day of resumed campaigning following last week’s suspension after the murder of Labour MP Jo Cox.
In response to the latest stats, Anthony Wells, Director of polling company YouGov, said:
‘We are now in the final week of the Referendum campaign and the swing back towards the status quo appears to be in full force’.
Euro Stable on Latest Ecostats, US Dollar Tanks on Concerns over ‘Brexit’ Implications
The single currency has for the most part been a strong contender today, much like the Pound. It’s most notable movements have included gains of 0.6% against the US Dollar (EUR/USD) and 1% against the Indian Rupee (EUR/INR), although losses of -0.3% against the New Zealand Dollar (EUR/NZD) and -0.9% against the Pound (EUR/GBP) have also been recorded.
In the case of the Euro, support has been offered by German and Spanish domestic data; Germany’s PPIs for May have improved on both the month and the year, while Spain’s April trade balance deficit has been reduced from -0.79bn to -0.64bn.
In the US, the ‘Buck’ has had a staggered start to the week, having recorded losses of -0.6% against the Euro (USD/EUR) and -1.6% against the Pound (USD/GBP) along with additional declines of -0.9% against the Norwegian Krone (USD/NOK) and -1% against the South African Rand (USD/ZAR).
With no US news out yet, it is likely that these widespread losses have stemmed from the fact that a number of economists have predicted around a trillion Dollars of UK-US trade activity being lost should the UK leave the EU.
Future GBP, EUR, USD Forecast: Eurozone Construction Output due Shortly, UK Borrowing Figures Tomorrow
The next data to watch out for will come from the Eurozone, in the form of the currency bloc-wide construction output stats for April. Current forecasts have been for an ‘improvement’ from -0.5% to -0.1% on the year.
Looking further ahead, tomorrow morning will bring the first notable UK news of the week, in the form of the national public finances and borrowing results for May. For base public sector net borrowing, a rise is predicted from 6.6bn to 9.4bn.
Current GBP, EUR, USD Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2910 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7746 today.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.4644 and the US Dollar to Pound Sterling (USD/GBP) exchange rate was trending in the region of 0.6829 today.
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1341 and the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8820 today.
