Home » News » Forex News » British pound could rise further as bookies back UK ‘stay’
Exchange Rates News British Pound

British pound could rise further as bookies back UK ‘stay’


CPI was 0.5%, its highest level since December 2014. It certainly helped the British pound stem some of the bleeding it’s been suffering from of late, and under normal market conditions a piece of fundamental data like this would be enough to give a substantial boost and possibly even initiate a new trend, but not whilst the uncertainty of the Brexit looms heavy. An ICM poll on the UK’s membership vote gave the ‘leave’ side its best result yet which limited sterling’s gains from the strong CPI reading earlier in the morning. Interestingly, the euro suffered too. Meanwhile, the FT’s ‘poll of polls’ is currently at 43-42 in favour of staying. Spreadbetting odds (historically the best predictor of events such as this) has a strong bias towards the referendum returning a ‘remain’ vote.


Stocks have recovered strongly from the start of the year woes, in the strongest rally in equities since 1933. It’s not all rosy though, as there is evidence that the ‘smart money’ is increasingly cautious in its global outlook, with major funds reducing their allocations to equities and increasing cash and money market holdings – a core strategy for preparing for a storm. Obama summoned Yellen to the White House for a last minute meeting, basically so he could put pressure on her to hold back on raising rates for fear of handing Trump the White House. Import Prices disappointed analysts yesterday, but the real meat of this week’s US data is yet to come – Retail Sales, PPI and Crude Oil Inventories today, CPI and Unemployment Claims tomorrow and Capacity Utilisation Rate and Consumer Sentiment on Friday.


The euro struggled to make much headway against a strong pound boosted by robust inflation data in the morning. Any semblance of a new trend was obliterated though by the release of a new poll that showed the pro-Brexit camp have the edge, which hurt not only the pound but also the euro, which fell back well into the 1.13s against the dollar. Credit Suisse and Citi are both long EURUSD, with Citi targeting as high as 1.20. JP Morgan are less constructive and have a limit order in to buy euros at 1.0730. The only single piece of fundamental data due this week from the Eurozone is tomorrow’s CPI, until then expect the euro to be at the whim of its trading counterparts.


8.30 GBP BOE Credit Conditions Survey
12.30 USD Core Retail Sales m/m +0.4% -0.1%
12.30 USD PPI m/m +0.3% -0.2%
12.30 USD Retail Sales m/m +0.1% -0.1%
12.30 USD Core PPI m/m +0.1% 0.0%
14.30 USD Crude Oil Inventories 0.9M -4.9M

The British pound was trading at 1 GBP = 1.2545 EUR at the time of writing.

The information contained in this document is collated from third party sources which are deemed to be accurate and correct. Argentex makes no warranty as to its accuracy or correctness. This document is provided as an information source only and is not to be construed as advice or solicitation to enter into any agreement to buy or sell any currency whether with Argentex or a third party.

Join us on our new LinkedIn page

Follow us on LinkedIn