This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/2016/jun/01/pound-falls-amid-fears-over-eu-vote-brexit
The article has changed 5 times. There is an RSS feed of changes available.
Version 0 | Version 1 |
---|---|
Sterling volatility rises amid fears over EU vote | |
(35 minutes later) | |
Sterling volatility has jumped to the highest level in more than seven years after a Guardian poll showed the Brexit camp is in the lead, as the EU referendum campaign picks up pace. | Sterling volatility has jumped to the highest level in more than seven years after a Guardian poll showed the Brexit camp is in the lead, as the EU referendum campaign picks up pace. |
One-month implied sterling volatility – the price of insuring against swings in the pound against the dollar – rose to 19.6% from 17% a day earlier, as Brexit fears mounted ahead of the 23 June referendum. | One-month implied sterling volatility – the price of insuring against swings in the pound against the dollar – rose to 19.6% from 17% a day earlier, as Brexit fears mounted ahead of the 23 June referendum. |
It was the highest level since the depths of the financial crisis in February 2009, a month before the Bank of England made the unprecedented move of cutting interest rates to an all-time low of 0.5%. | It was the highest level since the depths of the financial crisis in February 2009, a month before the Bank of England made the unprecedented move of cutting interest rates to an all-time low of 0.5%. |
Sterling volatility is considered a sign of market anxiety, and Wednesday’s surge followed a Guardian poll that showed voters are 52%-48% split in favour of leaving the European Union. | Sterling volatility is considered a sign of market anxiety, and Wednesday’s surge followed a Guardian poll that showed voters are 52%-48% split in favour of leaving the European Union. |
The pound tumbled to a two-week low against the dollar at $1.4439. | |
Sakis Paraskevov, an analyst at IronFX, told Reuters: “Sterling remains sensitive to any new polls that place a leave vote ahead by a considerable margin,. | Sakis Paraskevov, an analyst at IronFX, told Reuters: “Sterling remains sensitive to any new polls that place a leave vote ahead by a considerable margin,. |
“We expect the volatility in cable (sterling/dollar) to continue rising in the coming days, given that polls just a few days before the vote may have a bigger market impact than they did previously.” | “We expect the volatility in cable (sterling/dollar) to continue rising in the coming days, given that polls just a few days before the vote may have a bigger market impact than they did previously.” |
Most economists believe that a vote to leave the EU would trigger a sharp fall in the pound, while a vote to remain would drive it higher. | Most economists believe that a vote to leave the EU would trigger a sharp fall in the pound, while a vote to remain would drive it higher. |
Mark Carney, the governor of the Bank of England, warned last month that the British economy could slide back into recession if the country votes for a future outside the EU. | Mark Carney, the governor of the Bank of England, warned last month that the British economy could slide back into recession if the country votes for a future outside the EU. |