The shock that Britain has chosen to withdraw from the EU, has led to heavy losses on Asian stock markets. When it became clear during the night that the profits of the Proposed referendum on United Kingdom membership of the European Union-camp were much higher than predicted by the bookmakers and survey results, the financial markets reacted with huge losses. Early in the morning then the Proposed referendum on United Kingdom membership of the European Union was definitely. The exchange rate of the pound broke in a short time of 1.50 to less than 1.33 dollars, the biggest devaluation which had sterling per handle. The minus was more than eleven percent. Even on the dreaded Black Wednesday , as the Pound in 1992 had to leave the EWS, the depreciation rate was only 4.1 percent.
The reason: The Proposed referendum on United Kingdom membership of the European Union will have a serious negative impact on the British economy. It is uncertain how the UK intends to finance its large current account deficit of seven percent of economic power, and it filters from the financial markets. “We expect that the exchange rate of the pound could fall to 1.25 and by the end of the year during the year at 1.20 to the dollar,” the British-Asian bank HSBC predicted in the early morning. Rating agencies have already hinted that Britain could lose its best rating. Since the development of the Proposed referendum on United Kingdom membership of the European Union is negative for the entire EU, gave way and the exchange rate of the euro. He will fall rapidly according to estimates by HSBC to 1.08 dollar to the euro.
is expected in Europe with the intervention of the central banks in the markets. “We assume that the bond markets are einberechen now that Britain slides into recession and will reduce the Bank of England interest rates,” it said at the investment company Columbia Threadneedle in the early morning hours.
At the same time, it is expected that the German stock index DAX will start in the morning with drastic losses. The broker IG prized the DAX opening around 700 points lower than the close of trading on Thursday of 10,257 points. That would be a decline of 6.75 percent. The flight to safety was the gold price climbing in the morning to $ 1,335.10 an ounce, up 5.7 percent. In euro terms, the price shot up by 9.39 percent to 1207.43 euros per troy ounce.
Of the central banks is expected in the morning a statement. They had supplied the banks with additional liquidity before the vote. Severe shocks in financial markets lead to an extremely high liquidity needs of banks and their clients.
In the trading desks of global financial markets had indeed reckoned with dramatic price fluctuations. But the shock of the significant gains of the Proposed referendum on United Kingdom membership of the European Union advocates surprised markets because up until the evening hours, a victory of Remain Campaign had been within reach. In the City of London worked thousands of traders through the night and were preparing the Bank of England and the ECB on emergency operations in the markets. The price of gold soared, as the yen. “The markets will now overreact in the short term, since they had last set to a victory of Remain. But it will not come to a catastrophe, since both the banks as well as the central banks were more than six months preparing for this event,” it said at Berenberg in the early morning hours.
exchanges in Asia started with heavy losses. The Japanese Nikkei 225 lost three percent, the Japanese Topix 3.2 percent and the Hang Seng Index 3.4 percent. Bank stocks experienced heavy losses, the price of the British Asian bank HSBC fell 7.7 percent, the price of Standard Chartered 9.9 percent. It is expected that the stock exchanges and especially bank stocks will open in European trading with heavy losses, the result should confirm the vote for a Proposed referendum on United Kingdom membership of the European Union. “Now will surely be clear to everyone that you have to hedge its risks on the financial markets,” it said at the investment company Hermes in Friday morning.
It is expected that the Proposed referendum on United Kingdom membership of the European Union will lead to the entire global financial markets has created great uncertainty, according to the motto: purely in the security (gold, good government bonds, dollar and yen) , out of the risk (Europe, pound, euro, but also emerging economies).
If the final result confirmed a Proposed referendum on United Kingdom membership of the European Union, is expected to be heavy government crisis in Britain, the resignation of Prime Minister David Cameron on Monday, a change of government and extremely lengthy and difficult negotiations between the UK and the EU to the exit arrangements. The uncertainty that a Proposed referendum on United Kingdom membership of the European Union could also provide other EU countries before the ordeal would weigh heavily on the financial markets for months.
In the City of London has been feared in the early morning hours of Friday at the future status of the City of London. Hundreds of banks, investment companies and private equity firms and insurance companies use London as EU location to get from there to the so-called passporting direct access to the EU single market and to be able to market their services and products. Many banks have already announced that they need to relocate thousands of jobs in the EU at a Proposed referendum on United Kingdom membership of the European Union.
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