Compared to last week, the Pound has been effected to a less dramatic extent by UK Referendum news, although news from both sides of the argument has not been in short supply.
Former Conservative Head Declared ‘Leave’ on Monday, Pound Sterling to Euro (GBP/EUR) Up on Profit Taking
Monday’s UK Referendum news was mostly technical in its formation, although more general opinions were also put across on what a ‘Brexit’ could mean for the state of the UK’s finances in the future.
Despite the latest developments, the Pound Sterling to Euro (GBP/EUR) exchange rate was able to rally as investors embarked on a bit of profit-taking following the pairing’s 16-month low.
Former Conservative leader Iain Duncan Smith attempted to counteract the ‘doom and gloom’ consequence talk of the PM, instead claiming that leaving the EU would be a ‘stride into the light for the UK’. Indirectly supporting this ‘better apart’ message was former Bank of England (BoE) Governor Mervyn King, whose latest book foresaw that a major part of the European Union, the Eurozone, was unlikely to survive in the future, both conceptually and practically.
In other developments, Foreign Secretary Phillip Hammond gave a show of support for a policy measure that prevented ‘Out’ MPs from accessing specific documents and an additional furore was raised over the government’s estimation that it would take 10 years for the UK to completely pull out of the EU after an ‘Out’ vote.
Unusual Backfire from ‘In’ Campaign Head on Wednesday, GBP/EUR Exchange Rate Extends Gains
While last week brought an approximately even spread of events across the five days, Tuesday was a noticeable exception this week. With no real referendum news of influence, Pound Sterling (GBP) was essentially granted breathing room to recover, with the currency gaining on the Euro (EUR) and US Dollar (USD) although the morning’s poor manufacturing result limited positive movement.
Wednesday saw a 2-1 spilt of data for the ‘In’ and ‘Out’ campaigns respectively; in the former case, 200 small business owners and independent businesspeople signed an open letter in support of a ‘Brexit’. Additionally, a grilling of ‘In’ leader Stuart Rose resulted in the revelation that owing to the shortage of skilled workers that a ‘Brexit’ would cause, UK wages could actually rise.
The ‘Remain’ campaign’s contribution to proceedings was the publication of a document that, after conducting an analysis of all possible exit strategies, concluded that the only viable options for the UK were to remain in the EU or risk a loss of trade and clout in Europe with a ‘Brexit’.
Bosses (Apparently) Knew Best on the UK Referendum Yesterday, Pound Sterling (GBP) Dented by Services Data
Reversing Wednesday’s distribution of news, yesterday brought an ‘In’ majority in terms of announcements. UK employees at Rolls-Royce and Mini, both of which are owned by BMW, were sent emails from the parent firm, which highlighted all the possible troubles that could result from the UK exiting the EU and essentially promoted an ‘In’ vote.
The other ‘Remain’ news came from a higher power – French President Francois Hollande. Speaking at a summit, Hollande frankly admitted that there would be ‘consequences’ to a ‘Brexit’ and that such an outcome would likely damage UK economic development in unforeseeable ways.
The ‘Out’ contribution of the day was a prediction from British Chambers of Commerce Head John Longworth that if the EU was to remain ‘essentially unreformed’, the UK still had the potential to survive and possibly thrive if it left the international union.
While the Pound Sterling to Euro (GBP/EUR) exchange rate was little effected by the ‘Brexit’ news, the currency pair did trim some of its recent gains as the UK’s Services Sector PMI printed disappointingly.
Duncan Smith Weighed In Again Today with Fierce Attack on EU Referendum ‘Remain’ Efforts
With little out today in terms of ‘Remain’ announcements, this has left the stage clear for Iain Duncan Smith to continue his attacks on his campaign competitors. Today’s angle has been focused on the tone of the PM’s arguments to stay in the EU, with Smith claiming that the ‘In’ campaign was ‘bullying’ voters into staying in the EU and that by using ‘unsubstantiated claims’, the Conservative supporters of a ‘Stay’ vote would be damaging their reputations after the dust of June 23rd had settled.
That’s it for the UK Referendum roundup for this week, but we’ll be back next week with all the latest UK-EU news to keep you up to speed with the situation as it unfolds.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2899 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7754 today.