The UK goes to the polls on today to decide the future of the UK's European Union membership. The ‘Brexit’ campaign has a two-point lead vs. the so known "BrexIN" campaign, down from a seven-point lead last week, according to a TNS poll published on Wednesday.
Market researcher TNS' online poll showed 43% of respondents would vote for ‘Brexit’ campaign, while 41% would vote to ‘In’ campaign and 16% were undecided or did not intend to vote.
On Wednesday, USD was broadly weaker as risk appetite returned to markets, boosting higher-risk currencies, while GBP and EUR rose on the last day of campaigning before EU referendum.
The U.S. dollar index traded below 94 pips.
The British pound gained 700 pips vs. USD during the last two weeks backed by latest opinion poll results. If Britain votes to leave the EU, it is likely that there would initially be a sharp fall in the pound.
GBP could lose up to 25% of its value in less than one month, if England voters back a ‘Brexit’ campaign.
On the other hand, both Scotland and Wales could quit the United Kingdom if the vote goes against remaining in the EU.
The Foreign exchange market will be affected sharply by the outcome of the referendum and could see a high volatility. From a technical point of view, GBP pairs and Japanese Yen could face a price gap.
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.