Breaking: GBP collapses as Brexit looks increasingly likely

In a remarkable twist, polls are showing a likely Brexit outcome, with the Pound heading for ‘largest slump in history’

London-Square-Mile

A remarkable twist has occurred just a matter of minutes ago as the counting of votes from yesterday’s EU referendum in the United Kingdom begins to draw to a close.

In the period immediately prior to the referendum, it was almost impossible to predict the potential outcome of the referendum, as polls remained almost absolutely equal between those wishing to vote for Britain to continue its European Union membership and those wishing for Britain to become an independent sovereign state, and all through the night following the closure of polling stations the outcome was still very difficult to gauge.

So close were the polls that many of London’s interbank FX dealers remained at their desks all night in order to attempt to catch the market at the critical point once the result becomes known.

Less than half an hour ago, however, the potential outcome swung in favor of an exit from the European Union, an outcome which had been considered very unlikely by the majority of analysts, business leaders and commentators alike, regardless of their political view on the matter.

The results, which are being revealed region by region as votes are counted, are expected to be finalized within a matter of just a few hours from now, and with Sunderland (North East England) having just put its result forward, a swing in favor of Brexit has emerged, causing the pound to collapse in value.

Thus far, when looking at the map, it is quite as expected with regard to which regions are voting to remain in the European Union and which are voting to leave. Socialist Scotland is almost unanimous in its vote to remain in the European Union, and the affluent South East of England is clear on its overall trend toward wanting Britain to become independent from Europe, however the remarkable outcomes in the Midlands and the North, all of which are traditional Labor (socialist) heartlands, have begun to tip toward a ‘leave’ result as the night has progressed.

By 4.05am, 10 million votes in favor of leaving the EU had been counted. 16.8 million are needed to declare independence from the EU.

Perhaps even more remarkably, Pollster now shows Brexit as the most likely outcome after weeks of indicating towards a remain vote, and in the final hours of vote counting has begun to predict what is being considered to be the largest potential slump in the value of the Pound in history.

The markets have reacted sharply to this, dropping by 7% in the last hour to 1.3472 against the US dollar, which is a substantial decrease in value in a very short time for the otherwise very stable currency.

The Euro rallied against the Pound, gaining a 4.48% lead over the British currency over the last few hours.

Capture
Chart courtesy of Google Finance

Yesterday, the Pound reached its highest value in 8 years, as the polls looked toward a ‘remain’ outcome, the Pound being valued at its highest point since before the financial crisis and pre-nationalization of the UK’s major banks.

Volatility has become very high, as spread on pairs involving the Pound has hit half a cent at interbank level.

Just 15 minutes ago, Nigel Farage, leader of the UK Independence Party tweeted “I now dare to dream that the new dawn is coming up on an independent United Kingdom.”

Unlike elections of politicians and prime ministers, there will be no exit polls for the referendum and the final result will be indeed final, and is likely to be revealed in approximately two hours from now.

Capture
Chart courtesy of Google Finance

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