- Pound Euro Maintains Strength – GBP/EUR forecast to hold gains, investors without jitters before Referendum
- Euro (EUR) Drops Despite Optimistic ZEW Surveys – ECB claims ‘Brexit’ action is ready.
- Update: EU Referendum Takes Place – Citizens head to polls across the UK
- Update: Sterling Movement Mixed – Fluctuates against majors on Thursday
- Forecast: ‘Brexit’ Would Send Pound Plummeting – Markets preparing for ‘Remain’ vote
GBP/EUR Down 4% after Hitting Low of 1.20 on Brexit Result
Even before European markets opened the Pound Euro exchange rate plummeted to a low of 1.20 in response to the news that the UK had voted to leave the European Union.
GBP/EUR had previously rallied to 1.31 on indications the UK would vote to remain, so the unexpected twist in proceedings hit the Pound hard.
Although Sterling has since recovered to 1.23 we can expect serious market movement over the course of the day so stick with us for the latest updates.
(Previously updated 24/06/2016)
Pound Euro Fluctuates Close to 1.30 on Referendum Day
Sterling fluctuated against many of its major rivals, including the Euro, during Thursday’s trade session as citizens across the UK voted in the historic EU Referendum.
GBP/EUR movement briefly reached 1.31 as well as dropping below 1.30 at various points throughout the day, as investors readjusted their positions on the pairing ahead of Friday morning’s results.
While votes will be counted throughout the night after polls close at 10 PM BST, the largest scale movements in response to the results will not occur until after a ‘Remain’ or ‘Leave’ win is confirmed – sometime after 7 AM BST on Friday morning.
The relatively safe Euro remained sturdy against the Pound, and the Pound slipped against the shared currency throughout the day as Brits hurriedly bought holiday money ahead of the results.
(Previously updated 15:38 23/06/2016)
Pound Euro Falls Back to 1.29 as Votes Are Cast
As the European progressed and more members of the UK public cast their votes, the Pound fell against most of its currency counterparts.
The GBP/EUR exchange rate dropped -0.45%, falling below the 1.30 level, as investors became jittery over the prospect of a Brexit.
(Previously updated 10:00 23/06/2016)
Pound Euro Predictions Point to High of 1.40 for Sterling if UK Votes to Remain
With analysts predicting that the Pound Euro exchange rate could drop to parity on a Brexit but surge to 1.40 if the UK opts to remain in the EU, we can expect significant volatility in the GBP/EUR pairing over the next 24 hours.
As it stands, Pound Euro is trending in the region of 1.30 having advanced to a multi-week high on the back of a shift in sentiment in the run up to the vote. While the ‘Leave’ campaign pulled ahead at the beginning of June, the odds appear to have turned in ‘Remain’s favour.
The latest YouGov poll, published earlier today, also indicated that the UK would opt to stay part of the European Union.
(Previously updated 23/06/2016)
GBP/EUR Fluctuates on Day Before Referendum
The EU Referendum takes place in the UK throughout Thursday, and while many investors are already pricing in a ‘Remain’ result, the Pound fluctuated slightly on Wednesday as polls are being called too close to call.
New poll results released by Opinium on Wednesday reflected this, with ‘Leave’ ahead of ‘Remain’ at 45 to 44.
Investors are likely to react throughout Thursday to new poll results such as this, as well as potential exit polls around the UK, hoping to get an idea of what the final result will be.
The final results are not expected until Friday. As markets widely expect a ‘Remain’ result, a possible ‘Brexit’ vote would cause the Pound to plummet. Investors may also sell Sterling throughout Thursday, in order to take profit from its recent highs and prevent possible losses.
(Previously updated 13:16 22/06/2016)
The Pound Euro (GBP/EUR) exchange rate continued to gain on Tuesday, following its considerable advances throughout Monday. A shift in EU Referendum poll results away from ‘Leave’ has greatly improved investor confidence in the days running up to Thursday.
GBP EUR gained around 0.7% throughout Tuesday, and was trending in the region of 1.3050 at the time of writing. Since markets opened for the week, the exchange rate has gained over 300 pips.
While Sterling has since trimmed some of its gains, it remains considerably up on last week’s lows and has the potential to strengthen over the course of the day if the ‘Remain’ campaign’s final efforts are viewed positively.
The fact that a number of high-profile figures, including footballer David Beckham, came out in support of the EU referendum on Tuesday was seen to increase the odds of undecided voters opting to stick with the current status quo.
The latest odds offered by bookies from around the country indicate that the ‘Remain’ campaign may win the day. However, the UK’s general election provided a real shocker last year, so anything could happen.
Pound Euro Predictions: GBP/EUR Exchange Rate Remains Sturdy Despite Close #EURef Polls
While the Pound has not been nearly as strong as it was on Monday’s session, it has largely sustained its Monday gains and, against the Euro, has extended these gains even further.
Sterling soared on Monday as investors reacted to the latest series of polls, released between Friday and Sunday. These polls largely indicated that the ‘Leave’ camp’s previous lead was thinning, with some figures even suggesting that ‘Remain’ was ahead once more.
Many analysts have suggested that with over 10% of most poll voters still undecided, these ‘undecided’ voters are the key to the Referendum. Some argue that historically, ‘undecided’ voters lean towards the status quo. As a result, the number of ‘Remain’ bets has increased considerably since markets opened.
New polls and betting odds continued to be released and discussed on Tuesday, giving the Pound more mixed movement than its Monday bullishness but largely leaving it sturdy.
According to the Financial Times, new voting methodology has been used by some pollsters in attempts to narrow the margin of error sometimes associated with polls;
‘Research by leading pollster John Curtice for the National Centre for Social Research suggested that the result was too close to call.
The voting intentions study using new polling methodology recommended by an inquiry into what went wrong with last year’s general election polls has found that 53 per cent of people will be voting to remain in the EU, while 47 per cent support leaving.
Mr Curtice said the outcome “looks so close that any lead should be treated with caution”.
On Monday night, an ORB poll for the Daily Telegraph gave Remain a 53/46 point lead, but a YouGov Times poll gave Leave a 51/49 advantage.’
Following the trend of narrow results, a poll released by Survation on Tuesday saw a 45% ‘Remain’ lead to 44% for ‘Leave’, and 11% undecided voters.
However, rather than focusing on close polling data, markets looked optimistically towards betting odds. Bookmaking company Ladbrokes stated on Tuesday;
‘Remain gained more ground over leave during trading on Tuesday, with the latest Brexit barometer reading showing a 78% chance of a remain outcome, up from 74%, or 2/9 in betting terms, ahead of leave at 10/3.’
Euro (EUR) Uninspired as Market Focuses on Pound
The Euro saw little movement on Tuesday. It had previously gained on Monday due to bets that Britain would ‘Remain’ in the European Union, a vote that would also benefit the Eurozone.
Optimistic surveys released by ZEW did little to improve Euro sentiment as investors focused largely on Britain, with the EU Referendum closer each day.
ZEW’s German current situation report improved from 53.1 to 54.5, despite only being projected to gain to 53.0. The German economic sentiment leapt from 6.4 to a high 19.2, eclipsing a forecast fall to 4.8. The general Eurozone economic sentiment print improved from 16.8 to 20.2.
The Euro may also have been held down by the latest comments from European Central Bank (ECB) President Mario Draghi. As well as reminding investors that further economic stimulus was on the way, he added that the ECB has preparations in place in the event of a ‘Brexit’;
‘We will closely monitor the evolution of the outlook for price stability. We stand ready to act by using all the instruments available within our mandate, if necessary, to achieve our objective. In particular, the ECB is ready for all contingencies following the UK’s EU referendum.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: One Day to Go
This time tomorrow, huge numbers of Britons will be preparing to head into polling booths across the United Kingdom to cast their votes on the EU Referendum.
As for Wednesday’s session, a light economic calendar means little with foreign exchange markets certain to focus entirely on any potential shifts in ‘Brexit’ bets or opinions.
While most key players have said their pieces already, various businesses and major economists have been giving their views on the historic vote in the last few days.
Seemingly last-minute shifts away from a ‘Leave’ lead in the polls also indicate that it’s never too late for popular opinion to swing the other way.
If new polls are released today indicating that ‘Leave’ is gaining ground over ‘Remain’ once again, Sterling could easily plummet across the board. On the other hand, indication that a ‘Brexit’ is unlikely would leave Sterling sturdy for the time being.
Either way, the Pound’s volatility looks to remain near its recent highs and will be considered a risky investment until at least the end of this week.