In respect of a Brexit, analysts at Bank of Tokyo Mitsubishi explained that, indeed, the advance of the pound is very much a US dollar story.
Key Quotes:
“The BOE’s broad trade-weighted index is actually roughly unchanged in March which highlights the continued poor performance of the pound amid increased concerns over the economic outlook. The poor performance of the pound has continued despite some good news from opinion polls recently.”
“The ‘WhatUKthinks’ poll of polls has shown a widening in favour of ‘Remain’ over the month of March. This partly covers the period following the terrorist attacks in Brussels that some believed would harden support to leave. Quite the opposite it would seem.”
“‘WhatUKthinks’ also ran two polls asking voters 1) whether the UK would be better able to defend itself by remaining or leaving the EU and 2) whether the terrorist attacks in Brussels would change how they intended to vote. The first poll result showed 40% responded being better able to defend by remaining versus 38% by leaving while the second poll result showed 83% responded that the attacks would not change how they intended to vote.”
“This week also saw the publication of research from Populus and an independent polling analyst who correctly predicted last year’s general election result that concluded polling errors are taking place again like during the general election last year and these skewed results that show a smaller gap between ‘Remain’ and ‘Leave’ are inaccurate. The report shows that in reality, the ‘Remain’ campaign has an even larger portion of the vote than current polling results suggest.”
(Market News Provided by FXstreet)