BOE’s Carney assured lawmakers that the bank has been engaged in drawing out contingency plans in case Britain decides to exit EU.

Key Quotes

Recent fall in GBP consistent with purchase of downside protection around EU referendum date but dangerous to interpret short term moves

Element of referendum premium has come into GBP

Economy/households could still face bigger shocks, particularly from abroad

BOE’s Carney assured lawmakers that the bank has been engaged in drawing out contingency plans in case Britain decides to exit EU.

(Market News Provided by FXstreet)

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The Swiss franc is trading on a firmer footing vs. its American peer on Tuesday, with USD/CHF coming down to test lows near 0.9920.

USD/CHF lower on risk-off trade

The resurgence of the risk-off trade has benefited the Swiss franc today, prompting the pair to leave daily highs just above the parity level to test the lower bound of the range in the 0.9920 area.

Ahead in the session, SNB’s T.Jordan will give a speech, while US Exiating Home Sales, S&P/Case-Shiller index and Consumer Confidence are all due in the US docket.

USD/CHF key levels

The pair is now losing 0.41% at 0.9946 and a break below 0.9889 (38.2% Fibo of YTD down move) would open the door to 0.9755 (100-day sma) and then 0.9658 (low Feb.11). On the other hand, the next hurdle lines up at 1.0009 (high Feb.22) followed by 1.0120 (76.4% Fibo of YTD down move) and then 1.0262 (high Jan.21).

The Swiss franc is trading on a firmer footing vs. its American peer on Tuesday, with USD/CHF coming down to test lows near 0.9920…

(Market News Provided by FXstreet)

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Research Team at Lloyds Bank, suggests that with the starting gun fired and the date set, the coming months will no doubt be dominated by the EU referendum debate.

Key Quotes

Recent polls highlight the uncertainty of the outcome – which could easily translate into heightened volatility, especially for the pound. Since early December, when the prospect of a June referendum began to take hold, the pound has fallen by more than 10% against the euro.

So what do the polls say? What is striking is just how different recent poll results have been. This month the net percentage of respondents in favour of remaining in Europe have ranged from -9% (YouGov, 4th February) to +19% (Survation, 20th February). This discrepancy partly reflects how the polls were conducted – on the phone or online. Notably, during February the net percentage in favour of staying in Europe has averaged -4% online, compared with +12% in phone surveys.

Why the difference? This is not easy to explain – especially as it is generally believed that online surveys tend to appeal to a younger demographic that are typically more pro-European. Online surveys have been increasingly favoured by polling companies as they are cheaper to conduct and the number of people with phone landlines has fallen. But it may also be that online polls attract the strong opinions of those against the status quo, as they require more effort to respond to. Research after the general election concluded that phone polls were the more accurate and this may prove the case for the referendum.

That said, the percentage of undecided voters or non-voters ranges from +10% to +30%, which could well determine the outcome. Of course, we could be excused for ignoring the polls altogether given their poor record at the general election. For what it’s worth, the latest bookmakers’ odds put the probability the UK will stay in around 70%, little changed from last week.”

Research Team at Lloyds Bank, suggests that with the starting gun fired and the date set, the coming months will no doubt be dominated by the EU referendum debate.

(Market News Provided by FXstreet)

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