The British Pound has reached a new high of 2016 not because of some economic issues, but because of opinion poll results. According to Financial Times, the numbers of the Brexit supporters and detractors is now equal, 44% on both sides. The rest of the population haven’t made up their minds yet, and probably it will be them, whose votes will be decisive.
If the people vote in favor of exiting the European Union, the entire growth since the beginning of the week will transform into the decline, as fast as the growth. In The Guardian, George Soros predicts a “black Friday”, the most significant decline of the British currency over the last decades. According to his estimations, the collapse may surpass the “black Wednesday” record in 1992, when the British Pound was down by almost 15%.
One of the main reasons of this possible decline may lie in Scotland, where the number of those who want to stay in the EU is 51% (according to The Economist). Taking into account that the population of England in almost 10 times more than the Scotland’s, it’s obvious that the final result will be directly influenced by the English. However, even David Cameron, the Prime Minister of the country, admitted that if the Brits vote in favor of exiting the EU, Scotland independence supporters will raise the question about a new referendum.
We’d like to remind you that one of the prime considerations during the last year’s plebiscite in Scotland was the EU membership – Brussels declared expressly that a new country would have to undergo the entire procedure of accession again. Moreover, there is Northern Ireland, not a quiet place, where an opportunity of the visa regime with Ireland will barely slip nationalist parties’ attention.
Thus, if the Brits vote in favor of exiting the European Union this Thursday, it might turn the domestic political situation upside down. This is why one is recommended to close all GBP transactions, because on Thursday evening we expect an increased volatility, especially in the preliminary exit polls results turn out to be controversial.
RoboForex Analytical Department
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