WEEKLY REVIEW: the referendum on Britain’s membership in the EU – in or out?

Financial markets were volatile this week. Uncertainty over the referendum on Britain's membership in the European Union (EU) on June 23 remained in focus. According to the latest polls, the majority of Britons would support Britain's exit from the European Union (EU). The situation could change. EU referendum campaigning were suspended after the attack on Labour MP Jo Cox. Cox died after being shot. Cox supported the campaign "Remain".

The Fed kept its interest rates unchanged this week as widely expected. The central bank said that it kept its monetary policy unchanged because of the possible Britain's exit from the EU, noting that the exit could pose risks to the economy and the financial stability.

The Fed could raise its interest rates in July if Britain remains in the EU and the U.S. economy continues to recover after the weak first quarter.

It is likely that the currency pair EURUSD will rise toward the psychological level at $1.1300 or at $1.1400, if there are negative news from the U.S. and there are no negative economic data from the Eurozone, and if Britain remains in the EU.

If the U.S. economic data is better than expected and in case of the negative economic data from the Eurozone, and if Britain leaves the EU, the currency pair EURUSD may test the psychological level at $1.1100.