The major event for the week, overshadowing all others, was the referendum in Great Britain. And it resulted in a shocking outcome — Britons voted for leaving the European Union. Unsurprisingly, the Great Britain pound crashed hard after the result of voting had become clear.
The sterling was moving up for the most part of the week as polls were showing higher number of votes for staying in the EU than leaving. Yet everything has changed on Friday when all the votes were counted and an announcement was made: Britons want to become completely independent from the continental Europe. The immediate result of the voting was resignation of Prime Minister David Cameron, who had initiated the referendum in the first place (most likely in hopes that the “Stay” votes prevail, increasing his political capital).
As one could expect, the pound’s reaction to the news was extremely negative. The currency plunged more than 11% versus the Japanese yen on Friday while against the US dollar it touched the 31-year low.
GBP/USD was down from 5.7% from 1.4470 to 1.3639 over the week while its weekly low was 1.3227. GBP/JPY sank 7.9% from 151.36 to 139.45, touching the minimum of 133.23 on Friday. EUR/GBP gained 3.9% from 0.7824 to 0.8128, jumping to the high of 0.8311 immediately after the announcement of the referendum results.
If you have any questions, comments or opinions regarding the Great Britain Pound,
feel free to post them using the commentary form below.