Markets soaring just 48 hours to Brexit vote
With the Brexit vote taking place in less than 48 hours, many Forex online traders (Foreign Exchange Market) are sweating at their palms. Numerous, who are trading, had said that the markets were looking incredibly risky. Investors have been closely been following the vote. The vote will take place on Thursday. According to recent polls, the vote is set to be substantially close.
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However, surprising to many, at this present time the U.S and Asia’s shares have risen. Japan’s Nikkei stock index ended up on 1.3 percent. With the dollar increasing 0.5 percent to 104.44 yen JPY, moving away from an almost two-year low. The Euro gained 0.2 percent to $1.1331 EUR. The Sterling is seen to be standing tall despite the impending Brexit vote. The pound added 0.2 percent to $1.4708 GBP after a high rise. This is said to be due to suspicions that voters in Brittan would be remaining in the EU. Two of the latest polls showed “Remain” camp being in the lead.
It was stated that the polls weren’t meant to have an influence, however, there have been huge changes literally overnight. Germany’s constitutional court will be making an emergency ruling regarding the bond-buying plan. This was devised during the financial crisis by the European Central Bank. Brent Crude LCOc1 shed 0.9 percent, down to $50.21 a barrel, and U.S Crude oil down 0.8 percent at $48.99. Spot gold, XAU, also declined by 0.5 percent to $1,283.90 an ounce.
Although, according to macro fund manager, Raoul Pal, no matter which direction the vote, regarding the Brexit, the consequences for Europe could be dire. The EU’s membership is currently made up of 28 countries. If you are a citizen of a country that is linked to membership with the EU, you may work and live freely in another country which also has membership within the EU. Whether Britain will leave the EU, will all depend on what its citizens decide to vote. Pal mentioned that regardless of the vote, she believes something has already changed within the markets. He also mentioned that within the market there has been “a bit of panic” and that government bonds and bank stocks are being affected negatively.
The problem comes in where Brittan is not the only country that decides it has had enough and wants to leave. This could impact the entire EU. This could have an adverse effect on the economy for all. Pal also mentioned that regardless of the outcome it shows Europe as being weaker while possibly splitting the nation if Brittan does decide to leave. Setting rules will also prove to be difficult if Brittan is not on board. Billionaire investor, George Soros, also had comments regarding Brexit and Europe’s future. He stated that no more than ever before he saw Russia emerging as a global power, due to the European Union collapsing. Similar to when the European Union excelled when the Soviet Union collapsed. He also stated that he felt the destiny of the EU was hinged on the future of Ukraine.
