David Long

Dollar gains vs Pound, Euro as Brexit fears rise

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What does it all mean?

A referendum will be held on the Thursday 23rd June. The public vote will determine whether Britain will remain part of the European Union or exit.

Britain to leave the EU is extremely favourable amongst the British people as they believe the rules and policies that are imposed on its members are not fair. With extremely high fees each year there appears to be high costs for membership without any actual benefits. Britain national boarders are also lost at the hands to foreigners who are looking for employment and benefit entitlements.


The Prime Minister of Britain, David Cameron was favourable to the people because of his promise to give the nation a referendum on this decision.  He also faced pressures from his conservative party and several minority parties to exit the EU.

The main concerns of the general public are that they want Britain to keep its own currency.  They also want to have the ability to manage its large financial services industry without regulation and taxes having to be paid to a central Monterey body. The public don’t want the British Parliament to lose control of their Monterey policies.

Those in favour of remaining as part of the EU believe that the membership will boost the economy. It will lower trade barriers and improve their terms of trade. Arguments for the influx of immigrants adding to economic growth and a significant increase to taxes will intern add growth to the public services sector. The answer to the million dollar question, will Britain remain in the EU will be determined on the 23th of June.

Broader Impact of the Vote

Most economists would agree the No vote would create the most uncertainty amongst traders and investors. How this would impact the pound and the domestic economy is very difficult to determine. Currently the pound has strengthened against the Euro as the UK economy is showing signs of recovery. On the other hand the EU is struggling to show any signs of growth. Countries as Spain, Italy and Greece are experiencing massive budget deficits and recorded unemployment and record low tax revenues. The overall consensus is that the UK will remain in the EU and that the Pound will continue to strengthen.


The chart above represents the EURO dollar against the British pound.  Regardless of the predicted outcome of the referendum or the political environment the pound sterling continues to strengthen.

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