Sterling Jumps Higher On New Polls Indicating Anti-Brexit In Lead

Risk appetite was back in the markets and demand for safe haven assets eased as the anti-Brexit camp has gained momentum.

The pound strengthened as the outcome of a “remain” vote in the June 23 referendum on the UK’s membership in the European Union.

Sterling opened on Monday with a gap higher against the dollar at $1.4469 compared to Friday’s close of $1.4350. It reached a session high of $1.4621, the strongest level since June 6.

Helping improve sentiment towards the British currency was the publication of new Brexit polls over the weekend. Three of six polls indicated a shift towards keeping Britain in the EU. Until the end of last week, the pound was weakening drastically as polls had shown that the “leave” campaign was in the lead but the news of the killing of Labour MP Jo Cox, a pro-remain campaigner appears to have caused a shift in sentiment towards Brexit.

A higher risk appetite in currency markets today resulted a weakening in the yen, which is typically a safe haven asset in times of uncertainty in the financial markets.

The dollar jumped higher versus the Japanese currency at the Asian session open to trade at 104.68 yen versus Friday’s close of 104.10 yen.

The euro gained over 1% against the yen to rise to a session high of 119.13 after opening at 118.61 yen. The pair closed on Friday at 117.38 yen.

Against the US dollar, the euro climbed to $1.1381, the highest since June 9.

The fading demand for safe haven assets helped lift riskier currencies like the Australian dollar, which gained ground against the greenback to reach a high of $0.7452.

Gold saw a pullback after a big surge last week above $1,300 on risk aversion. The precious metal had benefitted from Brexit concerns in recent weeks and hit the highest level in almost two years last Thursday but has eased down today to trade at $1,280.

The economic calendar is a little quiet today but investors will look ahead to the next risk event tomorrow when Federal Reserve Chair Janet Yellen will testify before lawmakers in the US House of Representatives on Wednesday to discuss monetary policy and the state of the economy.

This entry was posted in PRO and tagged . Bookmark the permalink.
0 0 votes
Notify of
0 评论
Inline Feedbacks
View all comments