What's going on?

Britain votes on whether or not to leave the European Union on June 23rd. Recent polls have shown an increase in support for the so-called �Leave� campaign and the financial markets are reacting by pushing down the value of the British pound.

What does this mean?

Fears of a Brexit certainly increased in the financial markets last week. The pound lost about 3% of its value versus the Euro (i.e. if you went to Paris from London this past weekend, your spending increased by 3% versus the previous weekend – which is quite a bit really). It was down almost the same amount versus the dollar before the weak US jobs report (see above) caused the dollar to decline versus every currency, including the pound.

Why should I care?

The bigger picture: International investors are worried about the potential impact of a Brexit. Why? There are many factors, but in short, the global economy is very interrelated. If Britain and/or Europe suffers (even just in the short-term) then the global economic engine is liable to slow down. For example, a German factory, which sees its sales to the UK decline, might buy fewer parts from a Chinese supplier who will then lay off some managers who then won�t take their families to US-listed Pizza Hut for Friday night dinner… you get the point.

For you personally: The biggest near-term effect is likely to be on the value of the pound. The pound has sold off quite significantly this year versus other major currencies. Right now, it appears that markets are still expecting the UK to remain in the EU � but the likelihood of a vote in favor of a Brexit seems to have increased. If that continues, it�s quite likely that the value of the pound will weaken further � and concerns could start getting reflected in stock prices (globally) too.