Today, referendum on Brexit in the UK will be held, where the issue of future membership of the country in the EU will be decided. (Brexit is short for British exit). In the past several months expectation of this even put strong pressure on the price of the Pound and on the British stock market, as well on the Euro and European stock market. Authorities of the leading world banks repeatedly stated that this forthcoming event deterred from making some monetary policy decisions by the US Fed, the Bank of England and Bank of Japan and some others.
With the approaching of the data of the referendum, tension in the financial markets was increasing and the results of various polls of the British population changed movement direction in the currency pairs.
The last polls showed that majority of the British people are going to vote for the exit of the country from the EU.
However, the attack on the British Parliament member, Joe Cox last Thursday, who died in the hospital, has increased the number of supports of staying in the EU.
Since the beginning of this week, campaigns of agitation were banned. However, despite continuation of the resident polls, it is still not clear what will be the outcome of the Referendum.
If the UK leaves the EU, consequences will be hard for both the UK and EU.
The decline in British GDP may continue for a few years, causing the increase in unemployment and decrease in living standards. It is expected that the pair GBP/USD will fall by 10-15%. The head of the Bank of England said a month earlier that British Pound and stock market can fall by 20%.
For the EU it can become the beginning of the end, as the Union can either disintegrate or lose some of the members.
Economies of the UK and Eurozone will definitely suffer, as well as the economies of the other countries, causing the increase of investments to the safe-haven assets.
If the UK stays in the EU, and British people will vote against the exit of the country from the EU, it will be a great relief for the leaders of the UK and the Central Bank of the country, as well as the leaders of the financial elite and heads of the monetary authorities of other major countries, especially the Eurozone, USA, Japan, and Switzerland.
It is expected that the pair GBP/USD will go up by 5%. The Pound will win back all losses and grow up gaining positive momentum.
The stakes are high. Outcome of the referendum will be known tomorrow from 00:00 to 03:30 GMT. Official results will be announced at 08:00 GMT.