GBP soaring in early Monday trading as ‘Jo Cox effect’ lifts Remain side in Brexit polls

Most FX research analysts predicted volatility this week, and it looks like they are going to get it.

With currency trading restarting as the weekend turned to Monday morning in the Far East, weekend polls showing a marked jump for the #VoteRemain side were clearly supporting a jump in the British Pound. The GBPUSD pair was up about 1% early Monday from where it traded last on Friday, approaching 1.45 for the first time since June 9. And that was after Friday saw a more than 1% rise in the GBPUSD after news broke of popular pro-Remain MP Jo Cox’s fatal shooting.

On Thursday the GBPUSD was trading as low as 1.401.

Polls published over the weekend in the aftermath of the pro-Remain Cox’s murder – and the supposed agreement of both the Remain and Leave sides to tone down their rhetoric – showed a clear improvement in the Remain side’s fortunes. From a clear 5-8 point lead most polls were posting in favour of the Leave side as last as Thursday, most polls showed a very tight 1-2 point race as of late Sunday, with the referendum’s ultimate result still clearly in doubt.

Most retail forex brokers have responded to the (expected) rise in volatility in GBP pairs and the financial markets generally by cutting leverage provided to clients and raising margin requirements (such as Hantec Markets, Vantage FX, Saxo Bank, and IG Group), although some brokers have vowed to maintain normal trading conditions for their clients (such as easyMarkets) or have restored near-normal conditions after initially raising margins (notably FxPro).

It is bound to be a very exciting week in the currency markets. We will continue to bring LeapRate readers all the key developments as they occur.

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