Brexit: USD should strengthen vs GBP and EUR - BTMU

Analysts at Bank of Tokyo Mitsubishi explained that market participants have continued to price out Brexit risk over the past week in line with the widening lead for “remain” in the latest phone polls.

Key Quotes:

"The perceived likelihood of Brexit is now judged as relatively low.

If the perceived risk of Brexit remains low ahead of the referendum, the Fed may feel comfortable to raise rates in June, although we expect them to be cautious and wait until July assuming that the UK votes to remain within the EU."

"In the event of Brexit, the US dollar would likely strengthen sharply against the pound and euro, and the Fed would keep rates lower for longer."