GBP seen lower ahead of referendum – Danske Bank

Arne Rasmussen, Head of FI Research at Danske Bank, noted the Sterling remains under pressure in light of the upcoming EU-UK referendum.

Key Quotes

“GBP was little affected by UK Prime Minister David Cameron’s appearance on national television last night answering questions about the EU referendum”.

“We still see risks for GBP skewed on the downside going into the referendum on 23 June as Brexit concerns have reappeared in the financial markets”.

“According to our Brexit Risk premium estimates, 1.25pp is currently priced in the EUR/GBP spot rate (2 std dev. Confidence interval of 0 to +2.5pp). This implies that EUR/GBP is likely to trade at 0.7550-0.7780 post the election in the event of a ‘remain vote’.