- GBPUSD lost some ground since yesterday but remain at 1.46
- Yellen warns of the potential global impact of a Brexit
- Polls still suggest a tight result on the Referendum
- GBPUSD rates could hit 1.50 in the event of a remain vote
GBPUSD rates have fallen half a cent during the early hours of this morning as Brexit concerns continue to dominate the market. Never the less rates remain attractive at 1.46 ahead of tomorrow’s major event.
During yesterday’s FED meeting Yellen spoke to congress on the current US economic outlook which provided little hints on a rate hike anytime soon. If anything the meeting was vague as Yellen remains cautious regarding slow longer term growth. She did however, make the point that a US recession is unlikely.
Her views regarding the EU Referendum and the potential for a Brexit were highlighted as she told congress that a Brexit could have implications on the global economy, but remains sceptical that a Leave vote would trigger a US recession. When quizzed on slower job growth she remained optimistic that the slowdown is likely a ‘transitory’ period, she did however make further comments regarding Interest rates which are likely to ‘remain low for some time’.
It’s unlikely that yesterday’s meeting had a negative impact on GBPUSD rates and is more likely a result of tomorrow’s EU Referendum. Polls still remain very tight and a lot could happen between now and tomorrow.
At the time of writing, GBPUSD rates remain attractive at 1.46 and those looking to buy US Dollars may wish to do so before the end of the day to avoid potential losses.
GBPUSD rates to hit the 1.50’s?
If the UK remain within the EU I predict GBPUSD rates could hit 1.52-1.53, the only thing holding these rates back is the Referendum and given how mixed US data has been, these rates would not be unlikely.
It’s possible these rates could continue to climb as hopes of a FED hike continue to fade, coupled with the US election in November, the midterm outlook appears to support the Pound unless the UK vote to Leave the EU.
Whether you decide to gamble on the results or make a currency exchange now, be mindful of what a Brexit could do to your currency requirements and assess whether the results are worth waiting for.