British Pound Takes Beating As Brexit Fear Escalates

The British Pound tumbled to a two-month low against U.S. Dollar (CURRENCY:USD) as markets speculate about increased chances of Britain exiting from the European Union.

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Brexit concerns weigh on markets

A few of the recent opinion polls have revealed that the “leave” campaign is gaining support over the “remain” campaign. With the Brexit referendum scheduled next week, GBP/USD (GBPUSD) dropped 0.89% to 1.4141. Euro also traveled south, EUR/USD (EURUSD) slipping to 0.35% to 1.1252. Yen gained momentum as investors rushed for safety assets amid uncertainties. USD/JPY (USDJPY) fell 0.37% to 105.86. However, gains in Yen appeared limited after Finance Minister, Taro Aso, cautioned markets that they will take appropriate action to curb speculative moves in Yen.

Southeast Asian indices plunged heavily today tracking overnight loss in U.S. stocks and overall bearishness in global markets. Outcome of U.S. Federal Reserve’s policy meeting later in the day is among the critical events lined up for the day. As May nonfarm payrolls turned out to be weaker-than-expected, it is highly likely that the Central Bank will keep rates unchanged. Stronger Yen sent Nikkei 225 (INDEXNIKKEI:NI225) spiraling down by 1% to 15,859. Taiwan TSEC 50 Index appeared to have survived the storm as it closed 0.47% higher at 8,576.12.

IEA report positive change in outlook

iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) futures traded lower today even as the International Energy Agency (IEA) reported a positive change in its outlook. According to the Agency, global oil markets are moving towards stability in the second half of the year on the back of robust oil demand and supply outages. The IEA said that the oversupply in the first half of the year is expected to drop down to 800,000 barrels a day from 1.5 million barrels as projected earlier. Brent Crude fell 1.25% to $49.72 a barrel and West Texas Intermediate Crude oil slipped 1.41% to $48.19 per barrel.

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