We are giving this write up to emphasize on why Brits sentiments to exit from EU on the grounds of immigration and economic struggle by the euro.
The United Kingdom has had a significant faction of eurosceptics ever since it joined the EU in 1973. But until recently, this was a minority position.
"There are nearly 130 Conservative MPs who have declared for leaving the EU.
The global recession that began in 2008 was bad around the world, but it was much worse in countries that had adopted Europe’s common currency, the euro. The unemployment rate shot up above 20 pct in countries like Greece and Spain, triggering a massive debt crisis. Seven years after the recession began, Spain and Greece are still suffering from unemployment rates above 20 pct.
The intellectual case for Brexit is mostly focused on economics, but the emotional case for Brexit is heavily influenced by immigration. EU law guarantees that citizens of one EU country have the right to travel, live, and take jobs in other EU countries.
Adverse impact on Great British Pounds (least since three decades) on account of EU referendum:
GBP has been deep under pressure as the market re-prices the risk of a vote to leave. A lower GBP should not be taken as a strong sign "Leave" has won yet. However, it's been a black Friday for sterling so far.
GBP against other majors, such as GBPJPY tumbled from day highs of 160.110 to the current 136.172 levels (or 14.95%), GBPAUD 1.9668 to the current 1.8275 levels (i.e. 7.08%), while GBPCAD dropped from 1.9125 to 1.7538 levels (8.29%). EUR gained massively against GBP from day lows of 0.7599 to the current 0.8165 levels (or 7.44%).
Even if the vote is to leave, there is a lot of water to go under the bridge before Britain actually leaves the EU. We don't know what sort of deal they are going to cut with the EU.
A vote to leave would shine a spotlight on the UK's structural imbalances, in our stances; this would see GBPUSD fall to around 1.25.
The probability-weighted price for Cable if "Leave" and "Remain" are seen as equally likely outcomes is 1.39.
But the vote remains incredibly close. This suggests the market should start to price in a higher chance of a vote to leave than before. If the market starts to think that the probabilities of leaving and remaining are now 50% each, then the blended probability price for GBPUSD is 1.39.


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