Cable has had a lackluster series of trading sessions over the past several days printing negative closes on 5 successive trading sessions. Price reached a most recent high last Tuesday at 1.47691 on the back of receding fears of a Brexit success at the referendum on June 23rd.
However, that sentiment did not last very long, along with weak economic data released Wednesday last. GDP growth for the first quarter of 2016 was released at 0.4%, a substantial decline from the previous number at 0.6%. It would seem that the uncertainty being created by a vote on Britain’s future within the EU is creating a subdued business environment. Many corporations will be adopting a wait and see approach, until after the referendum.
Although it is not completely clear as to whether a Brexit would or wouldn’t be beneficial to the economy, financial markets do not like uncertainty, which means that in the meantime Sterling denominated assets are likely to see in an increase in volatility.
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