by Dan Norcini
Trader Dan
Safe haven flows are “IN” and risk is “OUT” at the moment ahead of the upcoming Brexit vote, particularly as the polls are showing a shift in favor of exiting.
[…] The British Pound has been noticeably weaker against the US Dollar as the polls swing in favor of Brexit.
[…] That I can understand. What I am having trouble grasping is why it is weaker against the Euro.
[…] After all, it Britain exits, the fear is that it will set a precedent among other EU member nations that might lead to further disintegration of the monetary union. I would think that would pressure the Euro more so than the Pound. I can tell you that Gilt traders are extremely confused at the moment as hardly anyone is sure what direction British bonds will go after the vote. Perhaps it is simply money flows out of things Britain that is weakening the Pound, even against the Euro, more so than anything fundamental shaping that particular currency cross.