- UK currency appreciates as poll grouping points to slim ‘Remain’ win – ‘In’ voted linked to economic stability
- Last daily Eurozone data fails to cause notable shift – Confidence in Belgium business rises
- Analysis of earlier Eurozone results focuses on French weakness – Few signs of significant Eurozone recovery in near-term
- Tensions remain high as polling continues – Market remains positive for UK currency as results period approaches
Sterling has managed to hold onto its lead against the Euro over the course of the day, showing that confidence in a ‘Remain’ vote is still high for investors in the Pound. Although all of the Referendum polls have now been released, a recent collation by Britain Elects has shown an overall opinion of ‘Remain’ getting 51% of the vote compared to 49% for ‘Leave’.
Eurozone news has done little to influence the GBP/EUR pairing; while Belgium’s business confidence in June rose from -2.8 to 0.7, this was ‘too little too late’ to enable any sort of rise for the Euro against the Pound.
With no real new news to focus on, economists have turned back to the earlier Eurozone PMIs for June. Paul Hannon of the Wall Street Journal has stated:
‘The surveys suggest the Eurozone entered a fourth year of recovery in the second quarter, but remained stuck in a combination of low growth and subdued inflation that it shows few signs of escaping soon’.
Overall, investors remain on edge but cautiously optimistic, with the first announcements of voting results expected to come in after 11pm tonight.
(First published 13:20 June 23rd, 2016)
The Pound has opened on voting day for the EU Referendum on an uncertain footing, with pairing movements being diverse across the board.
The Euro has made similarly varied movements, with the morning’s domestic data doing little to put the single currency on a decisive footing against its competitors.
UK Economic News: Referendum Voting Well Underway, Sterling Unsettled
The day has finally arrived for the UK; voting has begun to decide whether the UK remains within the EU or leaves it. Earlier on in the week, the Pound had been able to appreciate against peers due to polls raising the odds of the stability-linked ‘Remain’ camp winning, but more recently, the outcome has been a lot harder to call.
This is partly on account of the latest polls to hit publication; ComRes and YouGov have predicted ‘Remain’ as winning with 48% and 51% of the vote respectively, while in the opposite camp, TNS have put out predictions that ‘Leave’ will take the day with 43% to a weaker 41% afforded to ‘Remain’.
Offering a prediction for what may come of the UK after a potential ‘Brexit’, Secretary General of the Council of Europe Thorbjorn Jagland has said:
‘British islands will continue to exist and British people will continue to exist as part of Europe, so whatever happens, we cannot start isolating each other in Europe once again, it would be ridiculous’.
Notable Pound movements today have included gains of 0.4% against the US Dollar (GBP/USD) and the United Arab Emirates Dirham, while losses have been comprised of a minor dip against the Euro (GBP/EUR) and a greater decline of -0.7% against the New Zealand Dollar (GBP/NZD).
Euro’s Performance Echoes the Pound’s as PMI Flashes Amplify Uncertainty
The Euro has been an uncertain option for investors today, with losses being made up of -0.4% against the Australian Dollar (EUR/AUD) and -0.5% against the New Zealand Dollar (EUR/NZD) and gains consisting of 0.6% against the US Dollar (EUR/USD) and 0.7% against the Japanese Yen (EUR/JPY), along with a minor appreciation against the Pound (EUR/GBP).
The day’s Eurozone data has been made up of PMI flashes for manufacturing, services and the composite field in June, although despite the wide range of results, only the Eurozone and Germany’s manufacturing outcomes can be considered positive.
Future GBP, EUR Forecast: EU Referendum Results due Early Tomorrow, Major Volatility in Store
While tomorrow will bring both UK and Eurozone economic announcements, none of these are expected to make much of an impact due to the overriding influence held by the announcement of the EU Referendum results.
Current predictions have been for the final outcome to be known by seven in the morning, although on account of the estimated nature of these forecasts, the actual last posting of results may be sooner or later than this time.
Based on months of predictions by economists, the Pound can be expected to climb notably if ‘Remain’ wins the vote, while the more instability-linked ‘Out’ vote being dominant is forecast to send the UK currency spiralling downwards.
Domestic data for the UK tomorrow will consist solely of the BBA mortgage approvals for May, which are expected to drop on their previous printing.
For the Eurozone, input will be had tomorrow by the morning’s French GDP for Q1, as well as the German IFO surveys for business climate, current assessment and expectations in June. In the latter case, forecasts have been negative across the board.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3054 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7662 today.
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