As the country prepares to vote on its future, “in” or “out” of the European Union, polls suggest the result could go either way.
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Commodity currencies also took a step back and then rebounded, with the Australian dollar last up 0.3 per cent at US$0.7465, moving back toward a seven-week high of US$0.7513 touched on Tuesday.
“All the signs of ORB’s latest and final poll point to a referendum that will truly come down to the wire”, said Sir Lynton Crosby, a political strategist who advised the Conservatives at the last election.
A wait-and-see mood was expected to prevail through most of the day, dotted by possible bouts of volatility, as markets nervously await the results.
Leave had a 1-point lead over Remain in the same survey, which was published just 24 hours ago.
Sterling jumped from below $1.47 to above $1.48, after polls from YouGov and ComRes suggested that Brits will vote to remain in the European Union.
On referendum day, Ipsos-Mori will release an early morning poll based on surveys take today. “(But) the bookmakers have been right ahead of all of these votes that have been key for markets over the past few years and the polls have not swung back (towards a Brexit) this week”. “Even if betting and financial markets are proven correct and the United Kingdom votes against Brexit, the potential for political fallout in the aftermath is a downside risk”.
Kit Juckes, head of foreign exchange at Societe Generale, said there will be more ebbing and flowing in polls and sentiment but for now, pound sterling shorts are still being squeezed.
The swing to the status quo happened in other referendums on independence in Scotland and Quebec in Canada.
Despite the polling boost for Remain, the outcome of the referendum remains highly uncertain.
“The Brexit risk thus remains real”.
Campaigning had been suspended for three days after the killing of Jo Cox, a lawmaker and passionate advocate for Remain, led to soul searching about the campaign and its tone.
ETX Capital believes there is a 75% probability that the Remain campaign will win, but head of trading Joe Rundle has warned the accuracy of polls can not be relied upon and there is still “huge uncertainty” for markets.
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But NatCen, an independent research organisation, cautioned that “a vote of 50% each lies within the survey’s statistical margin of error and… the possibility of a majority for Leave can not be ruled out”.
