May 17, 2021

The British pound is on fire — here’s what’s happening in FX

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screen shot 2016-05-24 at 12.03.37 pmBy Elena Holodny From Business Insider

Good afternoon!

The British pound is stronger by 1.0% at 1.4622 against the dollar at 12:03 p.m. ET.

This follows a new poll conducted by the ORB for the Daily Telegraph, which suggests that “Remain” is building a big lead in the Brexit vote.

55% of respondents said they back staying in the EU, compared to just 42% who said they want to leave.

The referendum will take place on June 23.

As for the rest of the world, here’s the scoreboard:

The US dollar index is stronger by 0.3% at 95.56. Notably, the greenback may have more room to advance this year and next, as investors factor in a more active Federal Reserve and better-performing economy. “We believe we have seen the lows for the year,” a Deutsche Bank team wrote last week. “We still see the Fed as an important market driver and do not believe the dollar up-cycle is over. We remain dollar bulls, particularly against Asia and China FX.”

The euro is weaker by 0.7% at 1.1143 against the dollar after “Euro-area finance ministers signaled a willingness to compromise with the International Monetary Fund’s hard line on Greek debt relief,” according to Bloomberg News. Separately, Germany’s economic sentiment fell in May. The country’s ZEW survey sank to 6.4 from April’s 11.2 print, missing expectations of an increase to 12.1.

The Turkish lira is stronger by 1.7% at 2.9437 after Turkey’s central bank lowered its overnight lending rate by 50 basis points to 9.5%. This decision “provides further evidence that political pressure to loosen monetary policy is outweighing concerns about the currency in the MPC’s decision making,” argued Capital Economics’ William Jackson.

The Japanese yen is weaker by 0.7% at 110.00 per dollar. “The greenback held above JPY109 and bounced to recoup 38.2% of its decline since the pre-weekend high near JPY110.60,” wrote March Chandler, the global head of currency strategy at Brown Brothers Harriman, in a note to clients. “A move above this retracement (~JPY109.70) may yield minor gains, as it is likely to struggle to sustain gains above JPY110.”

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