In an interview to CNBC-TV18 Devesh Divya, Asia FX Strategist at Standard Chartered Bank shared his reading and outlook on the currency market. He expects markets to remain volatile at least till the time that we see clear pattern emerge in terms of Brexit versus Bremain.
In an interview to CNBC-TV18 Devesh Divya, Asia FX Strategist at Standard Chartered Bank shared his reading and outlook of Brexit or Bremain impact on the currency market. He expects markets to remain volatile at least till the time that we see clear pattern emerge.
Divya further said Brexit will see a massive risk-off event for global markets, dollar/rupee will move sharply higher, which may see Central Bank's intervention but if its Bremain, we may see pullback on dollar/rupee.
Below is the verbatim transcript of Devesh Divya's interview with Nigel D'Souza and Ekta Batra on CNBC-TV18.
Ekta: Yesterday the currency market was showing us a decisive Bremain kind of indicator but now it is shifting focus towards a Brexit. Can you tell us what you are reading from the currency market and what you are possibly telling your client at this point as well?
A: Markets had gone into this vote with the assumption that UK will vote to Remain and not Leave and that is why we had seen sterling at the start of the day, pound was almost at 1.50 level.
We have got some initial results and they clearly show a preference towards the Leave. As per the last vote that we have had, there is 54 percent voting for Leave versus almost 46 percent voting for Remain. The trend especially is quite worrying so in constituencies where people were expecting them to Remain, we have seen a shift towards Leave as well. So the trend against expectations is a little bit worrying.
A couple of caveats to that, first of all we have only seen the voting results from the first four percent. So 96 percent of the votes are still to be counted.
Secondly, the early morning votes that were supposed to come out were anyway supposed to show a preference towards Leave. So with those caveats in mind, it is still little bit early but clearly, markets are extremely volatile. We have seen a move all the way down from 1.50 to 1.40 in pound at one point today. So markets will remain extremely volatile for the next couple of hours at least till the time that we see clear pattern emerge in terms of Leave versus Remain.
For full interview, watch accompanying video...