- GBP/EUR Exchange Rate Appreciates 1.4% on the back of shifting sentiment – The tragic murder of MP Jo Cox saw campaigning suspended as a mark of respect.
- Pound Rallies as Pro-EU Sentiment Dampens Brexit Worries – Polls have shown a swing back towards ‘Remain’ after last week’s events
- Euro Investors More Comfortable as Market Woes Lessen – Implied probability of the UK staying within the Union increases.
- GBP Forecasts Difficult to Discern Pre-Referendum –Eyes will be locked on ‘Brexit’ results and little else.
The Pound Euro exchange rate has seen massive gains coming out of the weekend as the EU Referendum ‘Remain’ and ‘Leave’ campaigns resumed following suspension as a mark of respect for MP Jo Cox’s untimely and regrettable death.
Following a two-month low of 1.2521 just before the tragic events of Thursday afternoon, the Pound rallied spectacularly on Monday due to a perceived shift towards pro-EU sentiment. Analysts have posited that undecided voters may be attracted towards ‘Remain’ in order to distance themselves from last week’s violent actions.
Currently the Pound Euro exchange rate is trading at 1.2877, its highest levels seen since May. The pairing briefly climbed above 1.29.
Pound (GBP) Rallies across the Board as Volatility drops Almost 4%
Pound volatility has cooled somewhat as support for the UK staying in the EU increased following the distressing murder of MP Jo Cox last week.
An avid ‘Remain’ proponent and humanitarian, Ms Cox was shot and stabbed in the street outside a surgery she was attending. Thomas Mair, who was arrested for the crime, gave his name in court as ‘Death to traitors, freedom for Britain’. This horrific act has served to galvanise backing for remaining in the EU as Ms Cox’s death saw an increase in pro-EU sentiment within the polls and pushed implied probability of a ‘Remain’ outcome up to 67%.
Sterling has rallied by at least 1% across the board, with pairings such as GBP/USD seeing a 2% increase in reaction to these events, but the fact remains that the uncertainty approaching the referendum makes it unlikely the Pound would hold onto such gains unless we see a ‘Remain’ result on Thursday.
GBP/EUR Exchange Rate Gains but Euro Confidence Increases Amidst Feelings the UK will Stay in the Union
The Euro has been bolstered ever-so-slightly in the wake of both campaigns’ hiatus.
An increase in confidence that the European Union will remain whole following the death of Jo Cox has cooled fears over a ‘Brexit’, with polls showing a marked shift towards pro-EU sentiment. After the confirmation that last Thursday’s horrific murder of Jo Cox was politically motived, it is possible undecided voters may have been goaded towards ‘Remain’ in an effort to distance themselves from the shocking violence.
Until last Thursday, the Pound Euro exchange rate swung fairly wildly as uncertainty surrounding the upcoming referendum saw the rate rallying one day and faltering the next. Mixed market data for both economies did little to affect GBP/EUR although the Eurozone did see a small increase in monthly inflation. European industrial production also printed well but in the shadow of the ‘Brexit’ vote these revelations do little to afford much movement.
GBP EUR Exchange Rate Future Forecast Difficult to Predict as ‘Brexit’ Vote Imminently Approaches
With the UK’s EU referendum just three days away any upcoming market reports are unlikely to have much of an impact.
Doubt and uncertainty could reach a zenith in the run up to Thursday as voters scramble to make up their minds with the dreaded date arriving imminently. Polls have shown a shift towards pro-Remain sentiment after a campaign-free weekend and bookmakers have increased their odds for the UK choosing to stay.
UK house prices fell this month, according to Rightmove’s report, with annual values down to 5.5% from 7.8%. Typically falling house prices are a sign of economic weakness, but the data did little to effect the Pounds meteoric rise in continued proof that the British currency has all but decoupled itself from domestic ecostats. Bearing that in mind, we have a UK public finances release tomorrow but as mentioned before, unless it shows some form of massive change then it is unlikely to have much of an effect.
It is a pretty rich week for Eurozone data; German and Eurozone economic and business sentiment surveys are due for release this week, as well as the full range of Markit sector PMIs. All the data, good or bad, is likely to be overshadowed however, as it released just as the UK will be voting on its EU membership.
GBP EUR exchange rate forecasts will continue to be uncertain until the fallout from the referendum is dealt with.
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