Brexit: Pound Fluctuates With Headline Risks

The video discusses the market's reaction to Brexit, focusing on the pricing of Brexit risk and the behavior of the FX market. It highlights the volatility of sterling and the herd mentality influencing market movements. The correlation between sterling and UK equities is examined, with predictions on market behavior post-referendum. The video also explores the pound index and euro sterling dynamics, emphasizing the impact of dollar overvaluation and potential currency movements.

What is the market's current behavior in response to Brexit risk?

• Predictable and stable

• Random and chaotic

• Binary and herd-like

• Slow and steady

What is expected to happen to sterling and UK equities in the short term after the referendum?

• They will remain unaffected

• They will experience a strong rally or decline

• They will become highly volatile

• They will stabilize immediately

How does the pound index differ from the typical currency pair analysis?

• It is less reliable

• It ignores the euro

• It includes multiple currencies with specific weightings

• It focuses solely on the dollar

What is the primary reason for the recent rally in Cable?

• Eurozone stability

• Increased interest rates

• Dollar overvaluation and catch-up

• Brexit uncertainty

What is the expected movement in Euro Sterling after the referendum?

• A steady increase

• A gradual decline

• A spike either higher or lower

• No significant change