Sterling boosted by Brexit opinion polls

LONDON: Sterling hit a seven-week high against the dollar yesterday, getting a lift from recent opinion polls that have edged back in favour of the campaign for Britain to stay in the European Union and which has diminished appetite for safe-haven currencies.

Two opinion polls on Monday showed that the “Remain” camp has recovered some ground in Britain’s European Union referendum debate, but a third poll found those wanting to leave were ahead by a whisker.

The implied probability of a “Remain” vote in tomorrow’s referendum was at around 75 percent, having fallen to as low as 60 percent last Thursday, according to odds from gaming website Betfair.

Sterling rose 0.4 percent to $1.4747, its highest since early last month. On Monday, it climbed 2.1 percent against the dollar, its biggest one-day gain since late 2008, as investors and speculators cut bets against the pound.

“Some of the recent events have been favourable for Britain to remain in the EU, but it’s still too close to call,” said Manuel Oliveri, currency strategist at Credit Agricole. “We are advising our clients to go neutral into the vote, although we remain constructive. If Remain, wins we expect sterling to rise to $1.55.”

George Soros, the hedge fund billionaire who earned fame by betting against the pound in 1992, said a vote to leave would trigger a bigger and more disruptive sterling devaluation than the fall on “Black Wednesday”.

He said the pound would fall by at least 15 percent, and possibly more than 20 percent, to below $1.15, if Britain opted to leave.

The euro was flat against the pound at 77 pence, not far from Monday’s near three-week low of 76.925 pence.

Against the dollar, the euro edged up 0.2 percent to $1.1330, moving in sympathy with the pound. Traders expect the euro to be boosted against most major currencies like the dollar and the yen if Britain chooses to stay in the EU.

The dollar edged up 0.6 percent to 104.55 yen. – Reuters