Concerns over the ‘Brexit’ Referendum

The two-day Fed Reserve meeting ends today, amid concerns over the Brexit referendum and its effect on global markets.  Federal Reserve  is widely expected to leave short-term interest rates unchanged at its meeting, due to EU referendum and the disappointing May report on the U.S. employment market.  The U.S. Dollar index surged to 95 pips ahead of Wednesday’s Fed meeting.

Gold rose Tuesday to its highest level in six-week, thanks to the ‘Brexit’ Campaign and Wednesday’s Fed meeting.

The precious metal touched $1,290 and could re-test $1,280 during the course of the day.

The pound continues its decline, negatively affected by Britain's "Leave" campaign. According to the YouGov poll for The Times newspaper, the people in favour of "Leave" held 46% support vs. 39% support for "Remain", undecided people were 11%, while 4% plan to abstain. GBP traded at $1.41 vs. USD and could decline further to the psychological level of $1.40 before EU referendum.

On Tuesday, the yield on the 10-year benchmark German bond fell below zero for the first time ever, amid jitters over the upcoming EU referendum. Euro declined to $1.12 and could be supported before the Fed meeting.

Oil prices fell for a fourth straight session on Tuesday, amid concerns over the Brexit referendum. WTI traded lower at $48 and could sink further to $47.50.

The most important economic events:

  • USD Federal Open Market Committee Rate Decision (JUN 15): (GMT 20:00) - Important – Forecast (0.50%) – Previous (0.50%).
  • USD FOMC Rate Decision (Lower Bound) (JUN 15): (GMT 20:00) - Important – Forecast (0.25%) – Previous (0.25%).
  • USD Fed Summary of Economic Projections: (GMT 20:00) - Important

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.


CFDs and Spot FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based. Read More
Read More
Mail Call Chat