The pound rose to a new seven-week high against the dollar on Tuesday, extending Monday’s gains as opinion polls indicated growing support for a U.K. vote to remain in the European Union ahead of Thursday’s referendum.
GBP/USD climbed 0.28% to 1.1347, the highest level since May 3. Sterling climbed around three cents on Monday, in its strongest rally in nearly eight years.
Two opinion polls released on Monday indicated that support for the 'Remain' campaign had regained its lead over a vote to exit the 28-member bloc.
An ORB poll for the Daily Telegraph newspaper showed that 53% of voters supported the Remain campaign, compared with 46% support for the Leave campaign.
A poll published by NatCen also showed Remain on 53% and Leave at 47%.
But a poll by YouGov for The Times newspaper showed Leave ahead on 44%, with Remain on 42%.
The poll was conducted over the weekend, after the killing of Jo Cox, a Labour Party member and supporter of EU membership.
Investors remained cautious ahead of Thursday’s vote after economist Nouriel Roubini warned that Britain could tip into recession if it decided to leave the EU, particularly given the country’s large current account and fiscal deficits.
Billionaire George Soros said Tuesday that a Brexit would trigger a bigger and more disruptive sterling devaluation than the fall on Black Wednesday.
Sterling gained ground against the yen, with GBP/JPY rising 0.63% to 153.63, extending its recovery from the three-year lows of 145.37 set on Thursday.
The pound eased against the euro, with EUR/GBP rising 0.12% to 0.7707, still not far from Monday’s almost three-week lows of 0.7690.
Against the dollar, the euro pushed higher, with EUR/USD rising 0.22% to 1.1339.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.12% to 93.57 ahead of testimony on monetary policy by Federal Reserve Chair Janet Yellen later in the day.
The dollar was higher against the yen, with USD/JPY advancing 0.48% to 104.43.
Japan’s Finance Minister Taro Aso said Tuesday that officials would not intervene in the currency market lightly.
The comments came amid concerns over recent strong gains in the safe haven yen, which tends to be bought by investors in times of heightened market uncertainty.