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GBP/USD
Not quite the result the markets expected!
There we have it – The UK voted ‘Leave’. This was neither the simplest nor the most desirable outcome as far as market uncertainty is concerned, but the decision has been made! It’s now to two years of negotiations between the new UK prime minister and the EU powers that be in Brussels to forge a new relationship. However, the markets won’t hang around until that’s done and dusted. They will move on.
So it’s time to move onwards and, well, upwards. Pre-vote, the GBP arguably performed better than expected against the USD, while US stock markets flirted with record highs once more thanks to a weaker Dollar and diminished expectations of a forthcoming Fed interest rate hike. The UK 100 rallied on Thursday 23 June. What then are we to expect now that the UK has chosen the indirectly labelled path of most uncertainty?!
GBP/USD
The Pound Sterling went to 30-year lows against the US Dollar overnight on 23 June, yet has since retraced those losses to trade at Feb 2016 levels. Was the initial selloff an overreaction and has Cameron’s resignation re-ignited market confidence? Or are we simply looking at a dead cat bounce?
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Prepared by Michael van Dulken, Head of Research
