- Posted by Shyam Gokani in Bank of England, Brexit, Currency, David Cameron, Dollar, Economy, EUR, GBP, Mark Carney, Referendum, Sterling, UK
- June 21, 2016
- No Comments
Sterling hit its strongest level against the dollar since early May today, having the previous session posted its biggest one-day climb since 2008, as worries receded that Britain will vote to leave the European Union in two days’ time.
Two opinion polls on Monday suggested that the “Remain” camp had recovered some ground ahead of Thursday’s referendum on EU membership, following the murder of a pro-EU lawmaker.
And though a third poll put those wanting to leave were ahead by a whisker, bookmakers and betting exchanges – watched closely by investors – now put the chances of a “Brexit” at around 24 percent, down from 40 percent just five days ago.
Worries that Britain could vote to leave the EU have dominated sterling for months, driving a decline of more than 11 percent between mid-November and mid-April on a trade weighted basis.
The pound is massively vulnerable if there is a vote to leave.
Having already gained 2.1 percent versus the dollar on Monday, sterling rose as much as half a percent on Tuesday to a seven-week high of $1.4747
George Soros, the billionaire who earned fame by betting against the pound in 1992, said in an opinion piece published by the Guardian newspaper on Monday that a Brexit would trigger a bigger and more disruptive sterling devaluation than the fall on Black Wednesday 24 years ago.
Soros said a vote to leave could see the pound fall by at least 15 percent, and possibly more than 20 percent, to below $1.15.
2 days to go!
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