GBP: Movin' on up – Investec

Research Team at Investec, notes that the Sterling continues to be the stand out mover in G7 currency markets, with the Pound trading back over 1.47 against the greenback and 1.32 against the single currency yesterday.

Key Quotes

“EU referendum polls continue to be released confirming the lead of the Remain camp, seeing short Sterling positions being cut and the Pound continuing its squeeze higher. The risk for the Pound (as so much of the event risk is being priced out so far away from the voting day) is any poll favouring a leave vote in the coming weeks could see a Brexit priced in very quickly and sharply. We saw something similar only last week where the Dollar jumped as markets priced in an extra 30% chance of a June Fed rate hike in only 2 days after the April FOMC minutes.

Away from the Pound, equity markets in both Europe and the US had a strong day yesterday helping risk sentiment. Brent oil prices broke above the key $50 a barrel mark, continuing the price recovery of the commodity that has had so much focus in the last couple of years. Neighbours of the US were in focus yesterday, we saw the Bank of Canada keep interest rates on hold sounding a little less dovish than some may have expected, while the Mexican central bank were a little less hawkish playing down chances of a surprise rate cut. Overnight Asian stocks extended the global rally as oil prices continued to hold on to their gains.”