7. The effect of Brexit on living standards across countries

11. UK voters usually go for status quo or “progressive” change

13. BoE would delay hiking; dovish BoE would weigh on GBP

14. Current account:
The UK has a large (and growing) current account deficit

15. This is due to in part to an ever-growing trade deficit...

16. …and a growing deficit on FDI receipts (primary income)

17. FDI income falling because UK is invested in the wrong industries

18. Financial sector would be hit, cutting service surplus

19. Capital account:
Portfolio inflows (and some DI) have supported GBP

20. Most of the portfolio inflow has been into gilts

21. Lower yields would deter foreign investors in gilts

22. Direct investment
The UK is a huge beneficiary of foreign investment

23. EU is the major source of inward FDI

24. UK would be less attractive for FDI outside the EU

27. Impact on USD: Investors buy USD in uncertain times

28. Fed probably delays rate hike = maybe good for EM FX

30. If they vote REMAIN, where can GBP recover to?
There’s a Brexit discount in GBP

31. GBP is recovering as polls show REMAIN gaining

32. Speculators still short GBP

33. Risk Disclaimer: Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors. Before undertaking any such transactions you should ensure that you fully understand the risks involved and seek independent advice as necessary. Any opinions, news, research, analyses, prices, or other information contained in this document do not constitute investment advice.