24.06.2016 - UK voted in favor of exit from the EU

Currency trading and the euro. The price of euro showed a strong decline on a background of vote counting in the UK on the country's exit from the EU issue. Opponents of membership of the country in accordance with the preliminary data were victorious. As a result of this step, we expect a negative impact on the EU’s and the UK’s economy and rising political tensions in the region in connection with the possible desire of the other EU member states to come out of the union, in addition, the UK can split with the exit of Scotland and Northern Ireland. Volatility in the near future will remain extremely high and our medium-term outlook for the euro remains negative.

Currency trading and the British pound. The price of the British pound showed a drop to its lowest level in more than 30 years after it became clear that the eurosceptics are winning a referendum on the UK's membership of the EU with the preliminary result of 51.8% versus 48.2%. This step will lead to a slowdown in GDP growth in the country, the growth of risk in financial markets, and will hit the UK financial system. A possible increase in political risks in the country will continue to put pressure on the British pound. We expect a high level of price volatility in the coming weeks.

Currency trading and the Japanese yen. The price of the Japanese yen rose sharply against the background of increasing demand for defensive assets in connection with the results of a referendum on the UK exit from the EU. It is worth noting that after the strong growth of the Japanese yen, the authorities announced measures to fight speculation, increased volatility and filled the system with sufficient amount of liquidity. According to our estimates, the volatility will remain elevated, but the growth in demand for the US dollar and the measures taken by the Japanese authorities will probably lead to a correction of the yen. On the other hand, growth in the world's instability will maintain interest in defensive assets. We expect strong movements in the market in the near future.

Currency trading and the Australian dollar. The price of the Australian dollar fell following the decline in commodity prices and the strengthening of the US dollar. Volatility in the market will remain high due to the results of the referendum in the UK, according to which the supporters of the exit from the EU were victorious. We forecast a drop in the Australian dollar in the near future and medium term.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar fell following the Australian currency against the background of falling commodity prices and the US dollar growth. In addition, the strong downward momentum is due to fixation of long positions after long growth of quotations. Earlier, the Reserve Bank of New Zealand claimed the high exchange rate of the New Zealand dollar and according to our estimates a drop in prices will continue in the near future and medium term.

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