Market Update – 23rd June 2016 – Aussie Rallies Along With European Equities Ahead Of Brexit Polls

The latest Brexit polls suggest tonight’s vote will be business as usual and the U.K will remain one of the 28 members of the European Union…but you can not predict this categorically and so risks are still present; certainly however it looks like an unlikely scenario at this stage. European equities advanced on the news and polls, and are now ahead for the month having erased all losses over the past few session stemming from the nervousness surrounding the EU membership vote.

Locally the Aussie dollar has stormed back past 0.7500 vs. the Greenback with renewed risk appetite in the market and on recent comments from Janet Yellen of the U.S Federal Reserve which suggest the U.S rate tightening cycle ended after the very first rate hike back in December. It’s now looking very unlikely that we’ll see further rate hikes from the U.S Federal Reserve this year, however again this will come down to U.S economic data, jobs numbers and so forth.

AUD/GBP is hovering just above 0.5070 and we expect bucket loads of volatility tonight as EU membership polls are counted in the U.K. If you haven’t already processed GBP payments, I’d suggest getting on this sooner rather later as it goes without saying that the U.K market will view a ‘remain’ vote as positive and therefore we’d expect to see some strong gains for the Pound.

DATA RELEASES TODAY:

GBP – EU Membership vote tonight

AUD EXCHANGE RATES:

AUD/USD – 0.7517

AUD/GBP – 0.5073

AUD/EUR – 0.6632

AUD/NZD – 1.0483

AUD/JPY – 78.733

***Above rates are indiciative wholesale rates and intended as a quide only***

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Patrick Downes

Senior Corporate FX Dealer

 Compass Markets

Contact Patrick for a quote on 0431 278 632

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