In his weekly blog for FX-MM, Nordine Naam, Natixis’ senior forex analyst, discusses the forex market’s movements last week – with Brexit risk dominating the discussion as opinion polls swing back and forth in the final days before the UK’s referendum on EU membership.
Certainly, Brexit risk has instilled market uncertainty in the run up to the ballot, with the consensus that sterling will strengthen sharply in the event of a victory for Remain. Indeed, Brexit’s effects have also led both the Swiss National Bank (SNB) and Bank of Japan (BoJ) to hold fire on potential currency reserve and monetary easing interventions unless the UK votes to leave the EU.
Elsewhere, Naam predicts the Federal Reserve to hike interest rates in September, following poor macroeconomic indicators this month, although the mid-term future looks promising for US growth.
To read Naam’s weekly forex review in full, please click here.