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Euro Pound Exchange Rate Trends Narrowly due to Concerns Over Today’s Referendum

Euro Currency Forecast
  • Experts Expect Euro Pound Exchange Rate to Gain on a Brexit – Median expectations see GBP/EUR drop to 1.20 with worst-case expecting parity.
  • Polls Released Today show Conflicting Results – Two polls show ‘Remain’ edging ahead with a single TNS poll recording ‘Leave’ two-points in front.
  • Euro Retains Strength amidst Mounting Risk-On Attitudes – With the Pound a rising star, investors are drawn towards higher yield currencies.
  • Immediate Forecasts show a Massive Swing in Event of Either Result –Long-term projections can only be made once referendum results are known.

The Euro Pound exchange rate closed just a little under its opening price during yesterday’s session.

With public opinion perceived to be leaning towards a ‘Remain’ result, the abatement of Brexit fear and uncertainty has seen the Pound rally spectacularly of late. From last week’s peak of 0.7986 on the early morning of the 16th, the EUR/GBP exchange rate fell nearly three-and-a-half pence to a brief low this morning of 0.7643 Pounds to the Euro.

Landmarks and iconic buildings all around Europe have brandished Union flags in a mark of support and solidarity for the UK today as the nation takes to the polls to decide our future in the EU.

EUR/GBP currently trades at 0.7654, up slightly from this morning’s weekly low.

Euro (EUR) Strength Remains, Bolstered by Galvanised Pound Sterling (GBP)

Thanks to the prevailing risk-on market sentiment of late, investors have shied away from the somewhat sturdy Euro in favour of more lucrative, yet volatile, currencies.

The single currency has maintained its adequate strength however, due to its close association with the recently inflated Pound. As today’s session began, the Euro has noticed healthy appreciation against the US Dollar, Canadian Dollar and Japanese Yen, amongst others.

Demand for the Euro may have lessened in part thanks to Mario Draghi, head of the European Central Bank, who recently commenting on European banks’ readiness to act in the face of any potential movements that may endanger the Eurozone.

Draghi continued by eluding to possible future stimulus in the event of either result and his commentary weighed on the Euro.

GBP’s Meteoric Rally Tempered by Traders Awaiting Referendum Results

The Pound’s performance has been nothing short of stellar in the days leading up to today’s historic referendum.

Riding the wave of increasing pro-EU sentiment that appears to have kick-started in-line with the brutal and tragic murder of Labour MP and ‘Remain’ proponent Jo Cox, the Pound has seen major rallies in the majority of its pairings.

Remembrance services were held all over the world yesterday on what would have been Jo Cox’s 42nd birthday. One memorable speech concluded by saying that the late British lawmaker would be remembered, not for her death, but for all she had achieved during her life. A humanitarian and human rights activist, she was described by her friend and former colleague Kim Wallace as ‘a force for good, bringing people together’.

Her murder has been described as ‘an act of terror designed to advance an agenda of hatred towards others’. Her regrettable death has shed light on the extent of the feelings harboured during these tumultuous times as politicians have been scrambling to draw the voting public towards their respective camps.

Today surveys have shown a slight change from the neck-and-neck race with ‘Remain’ edging ahead in both the Comres and YouGov polls and a Brexit result two points ahead in the latest TNS data.

Euro Pound Exchange Rate Forecast Depends on Outcome of Brexit Vote

Due to today’s referendum results not being announced until tomorrow morning, investors have cooled off until further information can be gleamed.

Exit polls are unlikely to be held due to a lack of comparative data as the last EU referendum was over 40 years ago. It is likely traders will hold fire on any major transactions until the results are known in full and wily investors can take advantage of whatever circumstances present themselves.

Analysts have posited that the Pound could fall as much as 10 cents against the Euro immediately following a Brexit outcome. Conversely, they also mention we may see Pound Euro exchange rate rallies up to the 1.35-1.40 mark in the event of a ‘Remain’ result.