Noticias
24 Feb 2016

Mark Carney Confirms Brexit Vote Affecting Pound Sterling

For the past two weeks the Euro and Yen had been the favourites of the market. However this week the Dollar is central to all currency movements especially as the market adopts friendliness to risk. Meantime, Sterling has fallen below $1.40 for the first time since 2009 as Brexit concerns continued to weigh on sentiment. Opinion polls showing different outcome to the referendum highlight the level of uncertainty surrounding the issue.

The GBP/USD pair opens just above $1.40 this morning. The $1.39 level is a strong support level for sterling. EUR/GBP traded back up towards the 78p mark. A sharper than expected fall in the German Ifo (105.7 vs f’cast 106.7) in February was unhelpful for the euro. Although, the currency has continued to trade in a narrow range close to the $1.10 mark.

Looking to the day ahead, there is a much lighter feel to the data calendar. Indeed, the flash US services PMI for February and new home sales for January are the only releases of note. However, there is a busy schedule of speakers from all of the main central banks.

Given the light nature of the calendar, we could see the main FX pairs trading near current levels. Although, sterling could remain sensitive to any Brexit related news.

Where will the Pound be after ‘Brexit’ vote?

Bloomberg released an article today which outlined included a study of economist questioned regarding what level the Pound would fall to against the Dollar after the ‘Brexit’ vote. Economists suggested that the Pound could fall as low as $1.20 which was supported by seven respondents to the survey if British people voted to leave the EU. The most supported rate was $1.25 to $1.30 by ten respondents.

The ‘Brexit’ vote has become a political football which dragged Mark Carney into the discussion especially as Mayor of London, Boris Johnson joined the out campaign. Mark Carney acknowledged that the EU vote was weighing on the price of Sterling.

Just yesterday, one reporter for Reuters suggested that the Pound could fall by 20% if the vote on June 23rd was negative. If you are worried about the Brexit vote, contact our team today. We will help you protect your business from any further decline in the Pound against the Euro or Dollar.

The low down on German Business Confidence

Third fall in a row to 105.7 from 107.3 in January

Business confidence at lowest level in one year

7,000 German firms are surveyed on a monthly basis

IFO president stated that the outlook for the German economy was worrying

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