EUR/GBP Fundamental Forecast – June 14, 2016

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Published: Jun 13, 2016, 10:01 UTC

The EUR/GBP gained 90 points as Brexit weighs heavily on the pound as we are down to just 10 days before the UK referendum. The pair is trading at 0.7983

EUR/GBP Fundamental Forecast – June 14, 2016

The EUR/GBP gained 90 points as Brexit weighs heavily on the pound as we are down to just 10 days before the UK referendum. The pair is trading at 0.7983 near the top of its 2016 range. Data suggests speculators are adding to bets against the pound with short positions at their highest in at least three years.

Many analysts reckon a vote to leave the EU on June 23 would jolt Britain’s economy and send sterling tumbling by 15-20%, while a vote to stay would be likely to drive the currency sharply higher.

The Brexit issue has dominated the market since late last year, driving a decline of more than 10% in sterling on a trade-weighted basis between the middle of November and the middle of April.

Britain’s hefty current account deficit – 7% of output in the last quarter of 2015 – makes the economy, and the currency, particularly vulnerable to any pull-back in investment flows.

Analysts said that that investors were high-tailing it out of sterling as anxiety about a possible vote to leave the EU sky-rocketed.

“Ahead of the referendum, many look for sterling to underperform and the yen and Swiss franc to outperform,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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Tuesday, June 14, 2016

Cur.	Event	Actual	Forecast	Previous
AUD	NAB Business Confidence (May)			5
JPY	Industrial Production (MoM) (Apr)			0.3%
GBP	CPI (MoM) (May)		0.3%	0.1%
GBP	CPI (YoY) (May)		0.4%	0.3%
GBP	PPI Input (MoM) (May)		0.9%	0.9%
EUR	Industrial Production (MoM) (Apr)		0.7%	-0.8%
USD	Core Retail Sales (MoM) (May)		0.4%	0.8%
USD	Export Price Index (MoM) (May)		0.3%	0.5%
USD	Import Price Index (MoM) (May)		0.7%	0.3%
USD	Retail Sales (MoM) (May)		0.3%	1.3%
USD	Business Inventories (MoM) (Apr)		0.2%	0.4%