Volatility around GBP expected to pick up pace – Danske Bank

Arne Rasmussen, Head of FI Research at Danske Bank sees the Sterling under increasing pressure as we get closer to the EU-UK Referendum.

Key Quotes

“The FX markets had a shaky and nervous start to the week with risk appetite tumbling amid further polls suggesting an ever so close race between the ‘Yes’ and ‘No’ campaigns in the UK EU referendum”.

“GBP price action has been characterised by large sudden moves in thin markets and with an increasing number of polls due ahead of 23 June the ‘rumour’-trading is unlikely to change”.

“While we still have a ‘Bremain’ as our base case we are biased towards a further widening of the spot risk premium embedded into the GBP this week”.