Sterling finishes a cent higher as the Referendum bubbles along

Firstly I just want to take the opportunity to mention the tragic news that MP Jo Cox has been murdered this afternoon. Whilst the whole country fiercely debates the EU referendum and the future of this country, we should all recognise the sadness for Jo’s friends and family.

Sterling/Euro is residing in the 1.26 region this evening having nearly falling into the 1.24’s this morning.

The Bank of England warned that the referendum is the largest immediate risk the financial world faces at the minute. The Bank made it clear that the repercussions of a Brexit would over-spill substantially further than the UK and Europe affecting the globe. Janet Yellen Chairlady of the Federal Reserve Bank in the USA has also suggested they will be monitoring how events unfold before they consider making any decisions regarding monetary policy.

The Bank of England did not change exchange rates today as expected and it was suggested that a Brexit would potentially cause the next decision to be a cut rather than a rise. This would be very significant for the UK if there was a cut but it’s certainly worth considering that the Banks forecast suggested there might not be a rate hike till 2018 anyway based on GDP and Inflation.

Tomorrow Mario Draghi, President of the ECB will deliver a speech which will no doubt have a sole focus on a Brexit. It has been no secret that the EU has been planning worst case scenarios if the UK leaves. Draghi has expressed his concerns on multiple occasions of the dangers of the UK leaving the EU so expect more of the same. The GBP/EUR rate could certainly have a very volatile end to the week.

If you would like to discuss anything regarding currency in the next few weeks please feel free to send me Ben Fletcher an email at brf@currencies.co.uk. There is so much happening in the world of currency at the moment and I am more than happy to help you make sense of what you’re looking to achieve.