Currency traders are dubbing it the “remain bounce,” buying Britain’s pound after torrid sales of sterling last week when markets feared the European Union’s most reluctant member would head for the exit door.
As British voters prepare for Thursday’s Brexit referendum on whether to leave the 28-member union, European stock markets have been enjoying a parallel upswing. Trading volumes were up by 60 percent Monday, adding more than $68 billion to the value of Britain’s biggest companies and making up for the dramatic flight from British stocks last week.
The frenetic activity was triggered by a series of weekend opinion polls suggesting the Remain in the EU camp may have snatched back the lead – if only by a percentage point or two – from Leave the EU campaigners.
Tuesday, Britain’s currency and stock traders paused, holding their positions as they tried to work out whether they had gone overboard Monday.
Most Asian markets extended Monday’s global rally on easing Brexit concerns. In Japan, the benchmark Nikkei 225 closed 1.28 percent higher. “The markets have a myopic focus on one thing: the U.K. referendum vote,” Chris Weston, an IG Markets strategist in Melbourne, wrote in an analysis Monday.
Bankers, currency traders, investors and gamblers have a lot riding on Brexit.
