Pound rebounds in a quiet Easter Monday trade

Monday, Mar 28 2016

There were no data releases from the UK today, with Pound going higher, but Brexit remains in focus. The campaign for Britain to leave the EU has been backed by 250 business leaders including the former chief executive of HSBC, the Vote Leave group said on Saturday, hoping to counter the view that UK businesses back staying in the bloc.

The camps arguing for and against Britain staying in the European Union ahead of a referendum on British membership on June 23 have both made the economic impact of a 'Brexit' a cornerstone of their campaigns. Meanwhile, the Times newspaper reported that hedge funds were planning to use exit polls to make big profits on the day of the referendum.

Under electoral law, it is illegal to publish the results of such polls while people are still voting but a private poll could allow traders to exploit moves in the currency market, with sterling expected to rise sharply against the dollar GBP= on the back of an "In" vote but decline if Britons vote for an exit.

Sterling fell to multi-year lows this week on a perceived rise in the chances of an EU exit, and on companies and fund investors hedging against it, though the currency later steadied. "There is a lot of interest around Brexit, particularly from the big U.S. funds," one unnamed broker told the Times. The odds of a Brexit narrowed on Tuesday as the Brussels bombings were seen boosting the 'Out' campaign.

Sterling is currently being traded few points above 1.4170 level. Pair is likely to find support around 1.41 handle and resistance above 1.42 level. Later today, in the US session, Existing Home Sales figures are scheduled for a release.

More in this category: « Will EUR/USD reach parity level? Existing Home Sales rose by 3.5% »