It’s al about GBP today – Danske Bank

Jens Sorensen, Analyst at Danske Bank, noted GBP remains in the centre of attention today.

Key Quotes

“We are in for a couple of very eventful weeks for financial markets in general and for FX markets in particular”.

“Not least the UK EU referendum marks a significant digital risk for the GBP. Post the narrowing/re-pricing of the GBP spot risk premium in the period from April to May the past weeks have seen a re-widening on the back of polls suggesting a very close run between the ‘Yes’ and ‘No’ camps”.

“FX option markets are also very clear: the EU referendum marks the by far biggest risk factor for the GBP since the financial crisis. With less than two weeks to the referendum opinion polls will be pivotal for GBP asset performance”.

“We expect volatility to remain high and see risks skewed towards a weaker GBP as uncertainty is likely to creep back in”.