Hints of FX intervention as central banks debate Brexit response
By GCRU Gold News on Friday, June 17 2016, 14:25 - Permalink
Warnings from officials in Japan and Switzerland on Thursday left financial markets wondering about what central banks are planning behind the scenes if Britain votes to leave the European Union next week.
Officials told Reuters earlier this week the European Central Bank would pledge to backstop markets in tandem with the Bank of England after a vote to leave.
But a raft of official policy statements following four major central bank meetings this week
and amid evidence that momentum within the British electorate is shifting towards the Brexit camp offered hints that policymakers are considering whether they will need to do more.
"Sharp fluctuations could occur in the FX market, with the pound depreciating massively amid low liquidity. This could prompt the central banks of the developed countries to conduct joint FX market interventions," said Antje Praefcke, a currency strategist at Commerzbank in Frankfurt.