Sterling rallies on Remain poll swing
21 June, 2016
Monday saw a dramatic swing back in the favour of the Pound across the board against most of the majorly traded worldwide currencies. The rate for buying Euros was two cents better by the end of the day and against the Dollar, rates were two and a half cents better than they were over the weekend.
The reason for this dramatic shift in Sterling strength is one poll released over the weekend by Survation which showed a swing back to the Remain campaign, giving them a lead over the Leave campaign of 3%. It is widely accepted that for “a big change of circumstances vote” to get through a referendum the “change side” need a significant lead in the home straight to get past the “undecided status quo vote” that inevitably comes to the fore on polling day. As such, with just four days remaining, the fears of a Brexit dropped significantly and the comfort of a potentially stable position gave the Pound a massive boost.
The reason for the swing in the vote has been put down to the terribly sad murder of MP Jo Cox, Nigel Farage’s incredibly mistimed poster and a natural late swing back to the status quo – all of which probably played a part. But it would take an incredibly brave person to assume that was that. Of the last thirteen polls done, nine have been in favour of a Brexit, varying between a 2% and a 10% lead for leaving the EU. This race is far from a foregone conclusion and as such, assuming that you can now hang fire and reap the benefits of a strengthening Pound could be disastrous. If we do Brexit, the expectation is that we could see a drop in the Pound’s strength of between 10-20% – that could put rates close to parity for GBPEUR.
Worth the risk?
Many of our clients have secured their rates over the last few days, to make sure they know what they are getting and to remove the risk from their upcoming requirement. Of course they might find themselves looking at better rates being available than they have achieved, after the referendum if the UK does stay in the EU, but at least they have no risk, are within their budgets and are safe in the knowledge they aren’t going to lose their overseas investments due to a lack of funds.
Make sure you stay in touch with your CI account manager to find out how you can secure you rate to remove the risk of Brexit – we have various options available, even if you do not have all of your funds available, or do not need your currency for some time.
We have extended opening hours over the referendum, so can be contacted outside of normal working hours – for further info, look at our website – https://www.currencyindex.co.uk/
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