By: DailyForex.com
The Euro and the Pound Sterling are both edging higher in today’s trading, just one day ahead of an important vote to decide the fate of both the UK and the European Union. Currency strategists expect significant volatility ahead for both currencies in the hours ahead of the referendum, with residual choppiness to likely follow through the week’s end. Currently, polls are showing the “remain” campaign pulling ahead of the “leave” camp; however, analysts concur generally that, at this stage, the voting is going to be very close. Sentiment among financial investors remains jittery, as a result, as an outcome of “leave” could pose myriad problems for the UK economy and the larger global asset market.
As reported at 11:15 am (BST) in London, the GBP/USD was trading at $1.4679, up 0.06%; the pair has ranged from a trough of $1.4644 to a peak of $1.4716 in today’s session. The EUR/GBP was up 0.35% to trade at 0.7695 Pence, approaching the daily peak of 0.7701 Pence.
Dollar Weighed by Yellen Testimony
Across the Atlantic, the US Dollar is under a bit of pressure after the head of the Federal Reserve Bank played down the possibility of a July rate hike. Many analysts believe that the outcome of the Brexit vote could play a part in the Fed’s decision making process, with a “remain” vote perhaps lifting the chances for a summer rate increase. A recent indicator, CME Fedwatch, suggested that markets are pricing in only a 12% chance that the Fed raises rates next month. The US Dollar Index, used to gauge the Dollar’s relative strength, is down 0.23% to trade at 93.802 .DXY.