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GBP weakens as EU referendum set for June 23rd – Investec

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Research Team at Investec, notes that the late last week UK PM Cameron negotiated with the EU what he is calling a special relationship for the UK.

    Key Quotes

    “The agreement, reached late on Friday after two days of talks in Brussels, gives the UK power to limit some EU migrants' benefits. It also includes a treaty change so the UK is not bound to "ever closer union" with other EU member states. UK PM Cameron was satisfied with the deal and said he will campaign with his "heart and soul" for the UK to stay in a reformed Europe, on the now announced vote date of June 23. EU exit campaigners said the "hollow" deal offered only "very minor changes".

    German Chancellor Merkel said this was a deal Mr Cameron could take to the UK electorate, although senior politicians in the Tory cabinet seem less convinced. Justice Secretary Michael Gove, and former leader of the opposition Iain Duncan Smith have both announced they are campaigning to leave the EU, while London Mayor and potential future Tory PM Boris Johnson (BoJo) has also stated he will be campaigning to leave the EU in what is already being coined as BoGo.

    Despite the deal on Friday taking the Pound over 1.4400 against the US Dollar before markets closed, the pair opened under 1.4300 as a split cabinet shows how deeply divided the nation is on a potential Brexit. Analysts are now trying to work out if the UK is better or worse off in the long run after such an event. The Sterling weakness against the greenback can't be attributed to better fortunes across the pond as their political wildcard Donald Trump won another Republican primary, this time in South Carolina, while Hillary Clinton again edged out Bernie Sanders in another closer-than-expected race.”
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