What to Expect From Markets After the 'Brexit' Vote

Britain votes today to decide whether or not to say 'adieu' to the European Union. Conflicting polls suggest the result, which is likely to be delivered early Friday morning British time, is too close to call. What doesn't appear to be in doubt is that the result will have far reaching consequences for markets and businesses, particularly in Europe and the U.K.

The pound: Analysts agree that a vote to leave will devalue the pound, though they differ on the size of the likely fall. HSBC's currency strategists expect the pound to tumbled 15% to 20%, Goldman Sachs is tipping a fall of about 10%, billionaire George Soros, who made much of his fortune betting against the pound in 1992, expects to see a 15% fall "and possibly more than 20%."

"On a leave decision, we expect the pound to fall to $1.30-$1.35 quickly, and we look for an eventual fall to $1.20-$1.25," noted Société Générale's Kit Juckes.

Citigroup sees things the other way round. A "remain" vote, it claimed, would bolster the euro which "could break its $1.15 resistance level and trade towards $1.20 and maybe higher."

Elsewhere, a spike in risk from a "leave" vote is likely to prove supportive of the dollar, while the yen and the Swiss franc are also likely to rise, albeit against the wishes of their respective central banks, according to Capital Economics analysts.

Gold: Société Générale is tipping gold to rise in the event of a vote to exit the EU. "'Brexit' would spark significant physical purchases of gold not just in the U.K. but also from the much larger European market," the bank noted.

Others, including Citi, are not so confident, noting that the recent run up in gold prices may have already taken the wind out of a potential rally while the end of the campaign, no matter what the result, will re-inject certainty that could undermine gold.

Equities: Analysts are almost unanimous that a "leave" vote will send London (and, to a greater or lesser extent, all) stock markets lower; while stay would provide a, possibly short lived, relief rally.

UBS believes the FTSE 100 could fall as much as 21% to 4,900, dipping below 5,000 for the first time since 2011 if Britain votes to leave, though its optimistic target is 5,500. The FTSE 100 was at 6,359.64 on Thursday, having posted an impressive 1.57% gain on the day.

Read more:

• How will Brexit affect the big companies in the UK
• Theresa May seeks support from Merkel and Macron
• Britain faces the deadline for Brexit
• UK’s government faces ‘total collapse’ over Brexit
• Fateful Brexit vote today at 21:00