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    Sterling off highs after poll showing Brexit race tightening

    The pound backed away from five-and-a-half month highs against the dollar on Tuesday after an opinion poll showing that the campaign for the U.K. to stay in the European Union lost some of its lead ahead of Thursday's referendum.

    GBP/USD was at 1.4701, almost unchanged for the day, after rising to highs of 1.4781 earlier, the most since January 4.

    The poll by Survation showed that 45% of voters supported the campaign to remain in the EU, with 44% supporting Brexit, as a vote to leave is known. 11% were undecided.

    This compared to the 45% voting for remain and 42% voting to leave in an earlier survey.

    If undecided voters were removed from Tuesday’s poll, Survation said that 51% would vote to remain with 49% deciding to leave.

    Two opinion polls released on Monday indicated that support for the remain camp had regained its lead after falling behind last week.

    The polls had been 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 billionaire George Soros said Tuesday that a Brexit would trigger a bigger and more disruptive sterling devaluation than the fall on Black Wednesday.

    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.

    Sterling rose to fresh three-week highs against the euro, with EUR/GBP down 0.48% at 0.7663.

    The single currency weakened against the dollar, with EUR/USD falling 0.51% to 1.1257.

    European Central Bank President Mario Draghi said Tuesday that the bank is ready for “all contingencies” following the Brexit referendum.

    He added that the euro area economy has gained momentum since the start of the year, but noted that uncertainty remains high and downsides risks are still significant.

    The comments came during testimony in the European Parliament.

    The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.37% to 94.02.

    Federal Reserve Chair Janet Yellen also warned of the risk of a U.K. vote to exit the EU on Tuesday, during her testimony to Congress.

    “A U.K. vote to exit the European Union could have significant economic repercussions,” Yellen said.

    She added that the Fed is “closely monitoring global economic and financial developments” and taking a cautious approach to raising interest rates.


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