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    British pound eases from 6-month highs as the voting unfolds

    The British pound retreated after rising to six-month highs on Thursday, as voting in a historic referendum on whether the U.K. should remain in the European Union got underway.

    The cable jumped to a six-month high of 1.4845 against the greenback,  before easing to 1.4760 up 0.36% for the day, as market participants braced for the opening of polling stations.

    While two opinion polls released late on Wednesday showed that the ‘Remain’ camp had gained a lead in the closely divided campaign, trading activity during the Asian session remained thin and cautious.

    MSCI’s index of Asia-Pacific shares outside Japan increased 0.2%, where many markets in Asia were flat to negative, with China’s main index among the biggest losers. Japan’s Nikkei 225 was an exception, as it gained almost 1%.

    Demand for the safe-haven Japanese yen remained intact, with the greenback adding just 0.2% to 104.63, while the common currency added 0.6% to 118.67 against the yen.

    Traders remained largely on the sidelines ahead of the referendum, as a closely fought vote could bring massive market volatility. Several investors expect the value of the sterling to fall by as much as 15% from current levels if the U.K. leaves the European Union.

    Reuters reported on Thursday that G7 finance leaders will issue a statement highlighting their readiness to take all necessary actions to calm markets in the event of a Brexit vote.

    Analysts estimate that it will be hard for the market to move until the voting results are announced. The sterling will be in focus, but the euro, the dollar and the yen will also be closely monitored, as they will reflect changes in risk sentiment.

    The cable was hovering near three-month highs against the euro, with EUR/GBP falling 0.18% to 1.7661.

    The euro rose 0.4% to 1.1354 against the dollar, while the U.S. dollar index, which tracks the greenback’s performance against six other major currencies was last down 0.21% at 93.62.

    The Aussie and Kiwi dollars reached multi-month highs against their U.S. peer, as sentiment was underpinned by hopes that the British voters will vote to remain in the EU in today’s crucial referendum.

    The Australian dollar rose 0.47% to a nine-month high of 0.7531, while the Kiwi inched up 0.46% to a 12-month high of 1.7196.
     

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