Pound erases loss after MP’s death

The pound erased losses against the dollar after the killing of a U. K. lawmaker Thursday fuelled speculation the nation’s voters will be more likely to favour remaining in the European Union in next week’s referendum.

Both the “Remain” and “Leave” sides suspended campaigning after the attack. Labour Party MP Jo Cox was murdered as she met constituents in West Yorkshire in the north of England. The Guardian newspaper reported an eyewitness saying Cox’s attacker had shouted “Britain First.” That’s the name of a group that campaigns against immigration and Britain’s membership in the EU.

“If the perception is that this terrible incident really moves the dial on voting intentions, then it may trigger a broader relief rally,” said Shaun Osborne, foreign- exchange strategist at Bank of Nova Scotia in Toronto.

The pound rose 0.3 per cent, to US$1.4239, as of 2:20 p.m. in New York, having fallen to US$1.4013 earlier.

The prospect of Britain exiting the trading bloc has fuelled nervousness across the globe, with the U. S. Federal Reserve saying on Wednesday the referendum was a factor in its decision to keep interest rates on hold. Bank of England officials left policy unchanged Thursday and said a vote for a Brexit could damage the U.K. economy.

Traders noted t he re- bound in the pound coincided roughly with a deterioration in odds that Britons would elect to leave the EU as tracked by Oddschecker’s survey of bookmakers. Those odds slipped below 39 after surpassing 44 hours earlier.

“If you do see uncertainty, that typically will drive voters to the status quo,” said Karl Schamotta at Cambridge Global Payments, which hedges currencies. The pound’s losses have been overdone, he said, and “we’re seeing a trade that’s entirely too crowded — at the end of the day, the market expectation remains that we will see a stay vote.”