Sterling Belief as Relief Rally Continues - Investec
Research Team at Investec, suggests that there was a risk averse feel to
currency markets yesterday (echoed in equity markets), although with
major central bank policy meetings later in the week there could be an
element of position squaring involved.
“It’s also worth noting we are entering the last week of the month and flow driven trade will start to impact currency markets.
The Pound continued its relief rally after rhetoric from US President Barack Obama late last week seems to continue the momentum of the remain campaign. The pound reached over 1.45 against the US Dollar and 1.2850 against the Euro. Risk premium for a Brexit event also seems to be pricing out of other areas such as option and rates markets, with bookmakers’ odds of a Brexit falling drastically for the first time in several weeks. Then again, historically, the Pound tends to rally across April as the new tax year begins, so perhaps we may see a new wave of selling interest from better levels come May.”