Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 08 June 2016 at 3:10 GMT

Brexit: GBPUSD trading choppy following narrow poll win for stay camp

APAC Sales Trading Desk / Saxo Capital Markets
  • The FTSE moved up slightly yesterday following a rally in crude oil
  • GBPUSD trading is choppy, between the 100 day and 200 day moving average
  • UK banks have slashed their exposure to sterling assets

By Saxo APAC Sales Trading

The latest opinion poll gives a narrow lead to the "stay" camp. The Times/You Gov poll conducted on June 6 showed "stay" on 43%, with "leave" close behind on 42%. This is a reversal of the June 3 ITV poll, which showed "leave" in the lead on 45%, trailed by "stay" on just 41%.

It looked like a crazy move yesterday in GBPUSD during Asia trading, with a rally of more than 1% and almost reaching the 200 day moving average. We are still trading in a very choppy way between the 100 day and 200 day moving average for the time being.

Give Brussels the boot? It's not long until Britons vote on whether to quit the EU, and polls differ on whether the UK is likely to choose to stay or leave the supranational body. Photo: iStock

The vols in GBP remain bid and trade close to the highs of the year following the crazy move we had in the spot yesterday.

All European rates were down again yesterday and UK rates were part of that, to a lesser extent: Gilt down 1.6 basis points. In UK auctions, 30-Year Gilts gave a  record low yield of just 2.095%

The FTSE was up slightly yesterday following the rally in crude oil, which traded at its highest level in a month. Royal Dutch Shell ‘B’ shares were up 3.07%, to almost £17.65, after the company announced plans to sell $30bn in assets over the next two years.

Research and comments

UK banks reduced their exposure to sterling assets in March by the greatest amount since the height of the financial crisis in January 2009, according to Bank of England data.

The £59 bn monthly decline in financial institutions’ holdings of sterling assets may have been driven by volatility ahead of Britain’s European Union referendum

For more on forex, click here.

– Edited by Robert Ryan

For trade strategies, comments and research regarding the UK referendum on staying in the European Union, please see


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