The EUR/GBP closed the week at 0.7901 up by 0.78%. According to Reuters that despite most polls being close, bookmakers have consistently put the "In"
The EUR/GBP closed the week at 0.7901 up by 0.78%. According to Reuters that despite most polls being close, bookmakers have consistently put the “In” campaign well ahead. Betting website Betfair shows the chances of leaving at around 31 percent.
Emboldened by those odds, some speculators are betting the pound could soar as much as 20 cents from current levels after next month’s referendum if Britons vote to stay in.
Most economists reckon leaving the EU would deal a blow to the British economy, with a hefty current account deficit – 7 percent of GDP in the last quarter of last year – leaving it vulnerable to any pull-back in investment flows. Any news that makes a Brexit more likely, therefore, knocks sterling.
For the week, the pound is down 1.2 percent versus the greenback, on track for its first weekly drop in four, having also been hurt by weak purchasing managers’ index (PMI) surveys that showed Britain’s economy slowed in April.
According to Thomson Reuters data, those bets, placed in recent days in the options market, are for sterling to hit $1.65 — a level not seen since September 2014 — the day after the June 23 vote.
Options that would pay out if sterling hit 1.5890 have also been placed, for June 27. Dealers say the trades are few in number, but if polls show the “Remain” camp edging ahead, demand for such options could gather pace.
FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Major Economic Events for the week:
Cur. | Event | Actual | Forecast | Previous | ||||
Sunday, May 8, 2016 | ||||||||
CNY | Trade Balance (USD) (Apr) | 40.00B | 29.86B | |||||
Tuesday, May 10, 2016 | ||||||||
CNY | CPI (YoY) (Apr) | 2.4% | 2.3% | |||||
Wednesday, May 11, 2016 | ||||||||
GBP | Manufacturing Production (MoM) (Mar) | 0.3% | -1.1% | |||||
USD | Crude Oil Inventories | 2.784M | ||||||
Thursday, May 12, 2016 | ||||||||
GBP | Interest Rate Decision (May) | 0.50% | 0.50% | |||||
Friday, May 13, 2016 | ||||||||
USD | Core Retail Sales (MoM) (Apr) | 0.5% | 0.1% | |||||
USD | PPI (MoM) (Apr) | 0.3% | -0.1% | |||||
USD | Retail Sales (MoM) (Apr) | 0.7% | -0.4% | |||||
Saturday, May 14, 2016 | ||||||||
CNY | Industrial Production (YoY) (Apr) | 6.5% | 6.8% |
Upcoming Government Bond Auctions
Date Time Country
May 09 17:20 Italy Announces details of bond auction
May 09 N/A Ireland Details of bond auction on May 12
May 10 11:30 Germany Holds I/L bond auction
May 11 11:03 Sweden Holds bond auction
May 11 11:30 Germany Eur 5bn Jun 2018 Schatz
May 12 11:10 Italy Holds bond auction
May 12 17:20 Sweden Details of I/L auction on May 19
May 12 N/A Ireland Holds bond auction