The British pound climbed to a six-month high against the dollar at the start of trading in Asia on Thursday as traders remained hopeful that Britons will vote to remain in the European Union in today’s referendum. Final opinion polls out yesterday showed a slight boost in support for the ‘remain’ camp, although a couple of polls put the ‘leave’ side in the lead by 1-2%. The FT poll of polls as of June 23 had the stay camp on 47% and the leave camp on 45%.
Polls across the UK opened at 06:00 GMT and voting will close at 2100 GMT. The first results of the vote count are not expected until the early hours of Friday morning.
The pound reached a high of 1.4843 dollars earlier in the day as short position squaring further boosted sterling. But it slipped to around 1.4750 in late Asian session as investors turned more cautious while voting got underway.
The euro slid to a 3½-week low of 0.7641 against the pound before rebounding slightly to around 0.7685, while against the yen, the pound firmed to just above the 154 yen level.
Risk-sensitive currencies such as the Australian and New Zealand dollars continued to benefit from the increased optimism that a Brexit will be averted. The aussie rose to a 7-week high of 0.7538 against the US dollar, while the kiwi climbed to a fresh one-year high of 0.7199.
The greenback was stuck in its recent trading range against the yen on Thursday although it briefly spiked down on Brexit jitters when the polls opened in the UK. The dollar touched a high of 104.97 yen earlier in the Asian session but settled around 104.40 yen after recovering from a dip to 104.02 yen.
There was little reaction to Japanese manufacturing PMI, which showed manufacturing activity in Japan contracting for the fourth month in-a-row according to the flash reading for June.
The euro edged higher against the dollar in thin trading in Asia today to climb to 1.1337 dollars, recovering from yesterday’s low of 1.1236 dollars.
Crude oil prices also attempted a recovery after falling sharply yesterday following a smaller-than-expected drop in US oil inventories according to the US Energy Department in the week ending June 17. WTI oil futures fell to $48.39 a barrel after the data but had rebounded to around $49.45 in today’s Asian session.
Gold prices tumbled to a 2-week low earlier in Asian trading but managed to bounce back in late session to stand 0.3% higher on the day at $1270 an ounce.
Trading is expected to remain cautious in thin liquidity for the rest of the day as the UK public decides whether or not they want to stay in or leave the European Union. In the meantime, flash PMI data out of the Eurozone and US new home sales and weekly jobless claims should provide some distraction to investors.
Risk Warning: Forex, Commodities, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full Risk Disclosure.