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    Sterling continues rally as Brexit fears diminish

    The pound extended a broad based rally on Monday as opinion polls suggested the Remain campaign is regaining momentum ahead of Thursday’s European Union membership referendum.

    GBP/USD rose 2.05% to a three-week high of 1.4651, extending its pullback from Thursday’s two-month trough of 1.4011. It was the largest one day gain since December 2008.

    Sterling also racked up strong gains against the yen, with GBP/JPY jumping 2.36% to 153.03, rebounding from the three-year lows of 145.37 set on Thursday.

    EUR/GBP dropped 1.36% to 0.7745.

    Opinion polls released over the weekend suggested that support for the 'Remain' campaign had regained its lead over a vote to exit the 28-member bloc.

    An opinion poll by Survation showed that 45% of voters supported the Remain campaign, compared with 42% support for the Leave campaign.

    A YouGov poll gave a one-point lead to Remain at 44% to 43%.

    Data from betting odds supplied from Betfair indicated that the implied probability of a Remain vote jumped to 78% on Monday from a range of between 60% and 67% on Friday.

    The shift in polls boosted the pound and revived risk sentiment, which had been hard hit by fears that a vote by the U.K. to leave the EU would cause turmoil in global financial markets.

    Campaigning for the Brexit referendum resumed on Sunday after a three-day hiatus following the killing of Jo Cox, a Labour Party member and supporter of EU membership.

    The dollar was higher against the yen, with USD/JPY up 0.24% at 104.42, moving away from the almost two-year low of 103.53 hit on Thursday after the Bank of Japan left monetary policy on hold, disappointing some market expectations for more stimulus.

    The dollar turned lower against the euro, with EUR/USD up 0.66% at 1.1351.

    The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.77% at 93.57, as the stronger euro weighed.


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