Britain’s exit from EU membership may not actually happen but so far, the fallout of a Brexit doesn’t seem to be as bad as anticipated.
The yen gained on Wednesday as a sense of relative market stability helped the sterling and euro hold steady above their post-Brexit lows although other European currencies remained troubled about longer term uncertainty.
Sterling and the euro had slipped and the safe-haven yen had surged after Britain's decision to leave the European Union sent tremors around world markets on Friday with volatility continuing into Monday. But the pressure has eased off somewhat since then with the pound heading up a third of a percent at $1.3390 and the euro moving higher 0.1 percent at $1.10745 at midday Wednesday.
Britain is expected to join the other 27 EU member states in Brussels today to discuss how to respond to the Brexit vote. The meeting follows Tuesday's summit with the British prime minister and the discussion will focus on the set of EU reform proposals to be unveiled by next March.
According to UBS's director of currency strategy in Zurich, Constantin Bolz,"After a few volatile days, the market seems to have found a new equilibrium for now, with the euro trading around $1.10 and sterling trading around $1.33."
US Dollar
In the U.S. some analysts are saying that the dollar was being held down by a switch in expectations concerning a proposed upcoming interest rate hike by the Federal Reserve. According to these analysts, the higher interest rate has already been priced into the markets for this summer and they are pricing in a 10 percent chance of a cut by September. The greenback was 0.4 percent lower on the day at 95.896 against a basket of currencies.