- UPDATE – Survation poll shows one-point lead for ‘Remain’
- EUR GBP Exchange Rate Strengthened – Greek bailout funds unlocked
- Christine Lagarde Issues Warning – EU unity at threat from more than ‘Brexit’
- GBP Rudderless after Shock MP Killing – Jo Cox murdered, referendum campaigns suspended
- EUR GBP Forecast – UK referendum predicted to overshadow data
Pound Remains Strong as Survation Poll Gives ‘In’ Camp 1-Point Lead
The latest referendum poll, this time by Survation, has also given the ‘Remain’ campaign a lead, although only by a single percentage point. However, when the undecideds were forced to pick a side, the result is a dead heat. This could worry traders, many of whom had anticipated the historical pattern of undecided voters leaning in favour of the status quo.
EUR GBP Exchange Rate News Unaffected by ZEW Surveys
The ZEW economic sentiment surveys for both Germany and the Eurozone exceeded forecasts on Tuesday, showing an unexpected improvement in confidence.
However, with EU referendum news lending the Pound significant support, the Euro was unable to derive much benefit from the results.
The EUR GBP exchange rate fell to a low of 0.7666 during the European session.
(Previously updated 19/06/2016)
Support for ‘Remain’ Campaign Sends EUR GBP Exchange Rate Lower
On Monday the EUR GBP exchange rate dropped by over 1% as the European session got underway and investors responded to the latest developments in the EU referendum campaign – specifically increased support for the ‘Remain’ campaign.
The Euro to Pound pairing was trending in the region of 0.7740.
The Euro held declines even as German Producer Price data exceeded forecasts, showing a 0.4% increase on the month in May and an annual figure of -2.7% rather than -2.9%.
Later in the session the Eurozone’s Construction Output report printed at -0.2% on the month in April and -0.4% on the year.
Tomorrow’s run of ecostats for the Eurozone could encourage some EUR GBP exchange rate movement, but the impact of data releases is likely to be limited as investors focus on the upcoming vote on the UK’s EU membership.
The ZEW economic sentiment surveys for both Germany and the Eurozone as a whole are scheduled for publication at 10:00 am.
Over the course of the European session the Pound Euro exchange rate surged to a high of 1.2994 – taking the pairing to within touching distance of the 1.30 level. Some analysts have predicted that GBP/EUR could rally all the way back to 1.36 if the UK votes to remain part of the European Union – levels not seen since the beginning of 2016.
Conversely, a vote to leave could see the Pound tumble by as much as 10% against peers like the the Euro and US Dollar.
(Previously updated 19/06/2016)
The unlocking of Greek bailout funds strengthened the EUR GBP exchange rate after the brutal murder of MP Jo Cox saw referendum campaigning suspended.
Now that campaigning has resumed in the EU referendum debate, however, there is potential for serious levels of EUR GBP volatility as the week commences.
(Previously updated June 19th @ 7:00)
EUR GBP Exchange Rate Advances on Greek Bailout and Slipping ‘Brexit’ Odds
Investors were relieved on Friday after Eurogroup creditors approved the latest tranche of Greek bailout funding, just a few weeks before the country is required to make debt repayments to the European Central Bank (ECB). The €7.5 billion loan is part of a much larger deal agreed by creditors in May, with further payments dependent upon the Greek government’s implementation of mandated reforms and austerity measures. Pierre Moscovici, top European Commission economic affairs official, described the payment as ‘a welcome breath of oxygen for the Greek economy.’
Overall, however, the Euro remained weak. Head of the International Monetary Fund (IMF) Christine Lagarde, warned that the threat to the European Union extends beyond the UK referendum, cautioning that:
‘Right now, too many Europeans are worried about their cultural identity, their security, their jobs, incomes, and living standards. And too many of them are led to believe that things would be better if only Europe returned to closed borders and economic nationalism. This is a serious challenge for the European project. It is high time to confront this negative vision with a new perspective for those citizens who feel left behind.’
‘Brexit’ Odds Fall after Murder of ‘Remain’ Supporter, Pound Slides
All referendum campaigning activity was suspended following the brutal attack on Jo Cox, in which the Labour MP was stabbed and shot multiple times. She later died of her injuries. MPs and political figures from around the world paid tribute, with all speeches, rallies and reports related to the referendum either cancelled or postponed in a show of respect.
The Pound was left without direction following the suspension of campaigning, thanks to it coinciding with an empty UK data calendar. GBP initially found some support as markets speculated that the worldwide horror over what happened to Jo Cox would galvanise support for the campaign to remain in the European Union, of which she was an avid supporter.
However, the Pound later weakened due to overseas news and data strengthening global currencies, while GBP continued rudderless.
Euro Pound Exchange Rate Forecast: Data Likely to Be Ignored as Referendum Vote Nears
While there is Eurozone and UK data due out over the coming days, the approach of Thursday’s referendum vote is almost certain to overshadow the figures.
German ZEW surveys are due out on Tuesday, while voting day holds a run of Eurozone PMIs. The impact of both of these data sets upon the Euro could be delayed until after the result of the referendum.
The UK is set to release house price and public borrowing figures. While these both usually cause significant Pound movement, they will likely to be overlooked for the simple reason that the outcome of the referendum could render the figures moot. A ‘Brexit’ vote is widely predicted to cause a drop in house prices and could increase public borrowing after a negative economic shock, meaning the latest figures could be subject to rapid change.
Current EUR, GBP Conversion Rates
The Euro Pound (EUR/GBP) exchange rate traded around 0.7878 during Friday’s European session, while the Pound Euro (GBP/EUR) exchange rate trended around 1.2691.