- Update: Pound Euro Exchange Rate Plummets as ‘Brexit’ Confirmed – UK to leave EU
- Euro (EUR) Movement Mixed Ahead of EU Referendum – Eurozone to be heavily affected
- Update: Sterling Rises on Thursday – Markets wrong after pricing in ‘Remain’ win
- Update: Prime Minister David Cameron to Resign – Uncertainty worsens through Friday
- Forecast: Pound Free-Fall to be Long-Term – ‘Brexit’ process could take years
Pound Euro Exchange Rate Likely to Continue Falling Next Week
European markets are unlikely to focus on data in the coming week with the announcement of a ‘Brexit’ still fresh on minds around the globe.
GBP/EUR lost over -500 pips throughout the week despite initially gaining on ‘Remain’ bets. The pair plummeted almost -1000 pips as Friday morning’s news became more and more apparent.
With the reality of a ‘Brexit’ now set in motion, global markets will focus on the possibility that central banks across Europe may introduce new policies to protect from potential damage to European economies. The Bank of England (BoE) and European Central Bank (ECB) have confirmed that they have plans ready to put into place in the near future.
GBP/EUR is likely to continue falling in the coming week. While the Euro may fall against many majors due to rising uncertainty over the future of the EU, the Pound will likely continue its current free-fall as Britain heads into the economic unknown.
(Previously updated 14:20 24/06/2016)
Currency Chaos Continues as Scotland Pushes for Referendum and Unrest Builds in Europe
The Pound Euro exchange rate remained around 4% lower as the European session continued on Friday and investors began to digest the repercussions of the UK’s decision to Brexit.
While Scotland (which voted overwhelmingly in support of Remain) is now calling for another election in hopes of leaving the UK, Eurosceptic attitudes appear to be on the rise across Europe.
Head of the SNP Nicola Sturgeon was quoted as saying; ‘It is a statement of the obvious that a second referendum must be on the table, and it is on the table.’
If other nations begin to push for a reform on EU membership it could lead to the dissolution of the institution.
(Previously updated 09:00 24/06/2016)
PM David Cameron Resigns, GBP/EUR Exchange Rate Holding 1.24
Shortly after 8:00 Prime Minister David Cameron resigned his post as Prime Minister.
The move was expected by many, but only added to the uncertainty inspired by the UK’s decision to Brexit.
Planning a getaway this October? A million seats from £9.99. Book by midnight #Brexit #EUref #DavidCameron #Cameron pic.twitter.com/27rJ8iPz8F
— Ryanair (@Ryanair) 24 June 2016
The decision is likely to trigger further violent fluctuations in the currency market in the hours ahead.
However, the fact that article 50 won’t be enacted lent the Pound a measure of support and GBP/EUR edged back up to 1.24.
Meanwhile, the Bank of England (BoE) trimed to calm financial conditions by assuring the world that it has prepared well for this outcome.
(Previously updated 08:00 24/06/2016)
UK Votes to Brexit, Pound Euro Hits 1.22 after EU Referendum Results are Counted
Even before European markets opened on Friday, the Pound Euro exchange rate spiraled to 1.20 in response to the news that the UK voted to leave the EU before rebounding slightly to trade in the region of 1.24.
The Pound previously achieved 1.31 against its European peer as initial indications pointed to a vote to remain.
The decision to Brexit also pushed GBP to its lowest levels against the US Dollar since 1985.
GBP/EUR is currently down 4% while GBP/USD is down 6.0%
Further significant market movements can be expected as the day progresses so stick with us for the latest news.
(Previously updated 23:20 24/06/2016)
GBP/EUR Exchange Rate Climbs to 1.31 – Will the UK Vote to Remain?
The Pound Euro exchange rate pushed its way to 1.31 following the closure of the polls on EU Referendum voting day.
Nigel Farage’s comment that ‘Remain’ may emerge victorious helped the Pound’s uptrend and the currency also gained on the US Dollar.
(Previously updated 16:40 23/06/2016)
Pound Euro Exchange Rate Dips on Referendum Day
The Pound to Euro exchange rate has fluctuated widely around the level of 1.30 during Thursday’s session.
Investors were initially confident on the Pound after new polls continued the trend of a weakening ‘Leave’ camp and a strengthening ‘Remain’ camp, but as the day continue Sterling slipped. At one point, GBP/EUR fell below levels of 1.30 to hit 1.2963.
Despite analyst warnings and jitters that a ‘Brexit’ was still possible however, the Pound Euro rate remained well up on the week’s opening levels.
Some analysts have suggested that the uncertainty of Friday’s results has led to a surge in demand for holiday money, with many Brits exchanging Pounds for Euros and US Dollars ahead of the results.
Overall, ‘Remain’ sentiment remained sturdy and priced into markets, with both Sterling and the Euro relatively sturdy. Results are expected to be released some time after 7 AM BST on Friday morning.
(Previously updated 15:27 23/06/2016)
The Pound Euro exchange rate slipped slightly on Wednesday as investors sold the Pound on its highs ahead of today’s historic EU Referendum vote. Sterling remained sturdy however, as markets and bookmakers appear generally confident in a ‘Remain’ result. The latest YouGov poll also indicated that the majority of the general public will opt to maintain the status quo and vote to remain part of the EU.
However, the TNS poll gave ‘Leave’ a narrow lead.
A representative from TNS commented: ‘With many members of the public still undecided or not planning to vote there is uncertainty around the outcome of the referendum.’
After hitting a June high of 1.3059 first thing on Wednesday morning, the Pound began to trade more flatly and trended in the region of 1.3010 on Wednesday afternoon. GBP/EUR remains around 275 pips above the week’s opening levels, indicating that Pound sentiment is still strong.
However, some analysts have predicted that the Pound Euro exchange rate could fall to parity if the UK opts to Brexit from the European Union. While the actual results won’t be known until tomorrow, any further poll results will be closely attended to.
Sterling (GBP) Wobbles 24 Hours Before Referendum
After a thoroughly bullish run throughout Monday and Tuesday, the Pound’s performance throughout Wednesday was mixed as it held its ground against some major currencies but dropped against others.
Sterling’s volatility has neared record highs in recent weeks with investors becoming jittery in the run up to the EU Referendum – the public vote to decide whether or not Britain will remain a member of the European Union.
With the UK’s economy currently heavily reliant on EU trade, a vote to ‘Leave’ (a ‘Brexit’) would leave the Pound with an uncertain future. As a result, fears that a ‘Brexit’ could occur have caused investors to lose Pound appetite.
The volatile Pound soared this week after new polls suggested that sentiment was shifting away from a ‘Leave’ majority. Analysts have also argued that undecided voters are more likely to vote for the status quo, a result that would please financial markets.
According to a collection of recent polls by Reuters, results amongst those who answered may lean towards ‘Remain’ this week.
‘SURVATION/IG – “IN” AHEAD BY 1 POINT
ORB/DAILY TELEGRAPH – “IN” AHEAD BY 7 POINTS
YOUGOV/THE TIMES – “OUT” AHEAD BY 2 POINTS
NATCEN – “IN” AHEAD BY 6 POINTS
SURVATION/MAIL ON SUNDAY POLL – “IN” AHEAD BY 3 POINTS’
However, these results are still considered too close to call by many analysts. As a result, the Pound’s bullishness slowed on Wednesday, with the possibility of a ‘Brexit’ still up in the air.
Euro (EUR) Sentiment Mixed Due to Risk-On Movements
During Wednesday’s session, markets rushed to make investments that could potentially land them the biggest profits from the EU Referendum in the event of a presumed ‘Remain’ vote.
As a result, risk-sentiment soared across the board, with the currently risky Pound leading the charge and other risky currencies benefitting. The relatively safe Euro was seen as comparatively unappealing.
However, due to its association with the Pound the Euro has remained generally sturdy as a result of ‘Brexit’ bets being softened this week.
Favour for the shared currency may also have been weighed down by recent comments from European Central Bank (ECB) President Mario Draghi. Bloomberg reports;
‘Mario Draghi said the European Central Bank has plans in place in case this week’s U.K. referendum on European Union membership sparks turmoil that threatens the outlook for the euro region.
At a hearing of lawmakers in Brussels, Draghi said policy makers “stand ready” to act if price stability is threatened and highlighted the Brexit vote as a potential risk.’
Draghi assured markets that while it is difficult to predict exactly how markets may be affected, the ECB had made all the necessary preparations and have contingencies in place to help support the Eurozone economy if a ‘Brexit’ occurs.
He also reminded markets that further economic stimulus was on the way. While his confidence may have reassured some, the possibility of new stimulus with or without a ‘Brexit’ held the Euro down.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Investors Could Sell the Pound Today
Citizens around the UK will be voting on the EU Referendum throughout Thursday, but the result is unlikely to be known until markets open on Friday morning ,so what does that mean for the Pound Euro exchange rate?
Until then, investors are likely to react to the latest poll results and analyses from polling experts. It is also possible that exit polls will be taken throughout the day, which may give an indication on how people are voting throughout the nation.
Jitters could well return with only a day until Britain’s future is decided, especially if polls suggest that the vote will be neck-and-neck, rather than edging towards ‘Remain’ as some investors expect.
However, in the absence of reliable exit polling, investors will instead react to the latest poll results from Opinium, YouGov and Ipsos MORI.
Closer-than-expected poll results could cause market certainty of a ‘Remain’ result to waver, and could lead investors to profit-take from the Pound’s highs to avoid potential losses in the event of a ‘Brexit’.
On a similar note, some analysts have suggested that with markets already pricing in a ‘Remain’ vote, the Pound may not appreciate considerably if ‘Remain’ wins. Because of this, the Pound Euro exchange rate is likely to plummet if ‘Leave’ comes out the winner on Friday morning.
