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    GBP/USD surges 2%, as Brexit remain campaign continues to gain momentum

    - GBP/USD surged more than 2% to near one-month highs on Monday, amid shifting public sentiments regarding a potential Brexit, as longstanding concerns related to the U.K.'s possible departure from the European Union continued to ease.

    The currency pair traded in a broad range between 1.4532 and 1.4719 before settling at 1.4699, up 2.30% on the session. After testing 1.40 last week, a three-month trough last seen in early-March, the British pound has rebounded sharply versus the dollar in each of the last three sessions. The Pound Sterling is now relatively flat against its American counterpart over the last month, erasing considerable losses from the start of June.

    GBP/USD likely gained support at 1.3852, the low from Feb. 26 and was met with resistance at 1.4770, the high from May 3.

    In the euro area, major stock indices soared on Monday as the "Remain" campaign ratcheted up support over the weekend ahead of a controversial referendum later this week. Last week, officials on both sides suspended campaigning for two consecutive days following the tragic murder of Labour Party parliament member Jo Cox. In the U.K., the FTSE 100 surged 3% to 6,204.00, while the broader Euro Stoxx 600 Index jumped 3.65% to 337.67. At one point on Monday, nearly 80% of respondents supported the Stay vote, up from 60% late last week. Simultaneously, top British businessmen, including Virgin Group founder Richard Branson urged voters to avert a Brexit in order to prevent a potential collapse in the Pound.

    Foreign exchange traders also await a two-day appearance by Federal Reserve chair Janet Yellen on Capitol Hill, starting on Tuesday morning, for further indications on potential delays from the U.S. central bank on the timing of its next interest rate hike. Last Wednesday, the Federal Open Market Committee (FOMC) voted unanimously to hold interest rates steady amid slowing labor market conditions over the previous two months. The market responded by downgrading the odds of monetary policy tightening through December. On Friday, Federal Reserve of St. Louis president James Bullard shifted his hawkish positioning by suggesting that the FOMC may only need to lift short-term rates once over the next two-and-a-half years given the current low interest global backdrop.

    Any rate hikes by the Fed this year are viewed as bullish for the dollar, as foreign investors pile into the greenback in order to capitalize on higher yields.

    The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.70% to a one-week low of 93.55, before settling at 93.68 at the close of U.S. afternoon trading. The index is down by more than 5% since early-December.

    Yields on the U.S. 10-Year soared eight basis points in risk-on trade to 1.69%. Last week, government bond yields on 10-year U.S. Treasuries fell to their lowest levels in four years. Yields on the U.S. 2-Year gained two basis points to 0.741% in more than a week. Earlier, the U.S. Treasury Department sold $26 billion of 2-year notes at an auction on Monday at the lowest yields since September, 2015.

    Meanwhile, yields on the Germany 10-Year rose three basis points to 0.05%. Also last week, yields on German bunds slumped to an all-time record low, falling into negative territory for the first time on record.


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