Pound Tops US$1.50 as Markets Expect Britain to stay in EU

The pound and euro both soared on Thursday (Jun 23) amid growing market confidence that Britain would vote to keep their country a member of the European Union.

The pound topped US$1.50 an hour after polls closed at 2100 GMT (5.00am Singapore time Friday), after trading higher against the dollar all day as investors hoped the “Brexit” referendum would fail.

The euro also surged to nearly US$1.1430, bolstered by comments from Nigel Farage, one of the leaders of the pro-Brexit camp, saying after voting ended that it appeared his side had narrowly lost. It “looks like ‘remain’ will edge it”, Farage told Sky News television.

The result of the vote will not be known until around 0800 GMT Friday (4.00pm Singapore time), and, with markets having grown confident throughout the day that the “remain” side would win, some analysts were concerned the markets could get it wrong.

“The outcome remains far too close to call and the actual impact on markets is also largely uncertain given the unprecedented nature of the event,” said Omer Esiner at Commonwealth Foreign Exchange.

Voting to break with the EU “could send the pound plummeting, while a ‘remain’ victory could reduce a massive risk premium from the value of the pound,” he said.

Courtesy : channelnewsasia