Pound Rises to Highest Level Since EU Referendum Date Was Set

The pound climbed against the dollar, reaching its highest level since before the U.K. set the date of its vote on whether to leave the European Union.

Just two days before the vote, sterling is heading for its biggest three-day gain since 2009. The currency climbed to as high as $1.4783, stronger than at any point since Prime Minister David Cameron announced the date of the vote in February.

With polls showing the “Remain” campaign is gaining support, bookmakers and gamblers are also strengthening in their conviction that the U.K. will opt to remain in the EU. Ladbrokes Plc said late on Monday that the odds on a “Remain” vote had shortened to a 2/7 chance, indicating a 74 percent probability. Some 95 percent of all referendum wagers in the previous 24 hours had been placed on voters rejecting Brexit.

 “Sterling is supported by the recent rise in support for the ‘Remain’ camp,” said Steven Barrow, head of Group-of-10 strategy at Standard Bank Group Ltd. in London. “But if you look at an average of recent polls they still suggest it is neck and neck.”

The pound advanced 0.4 percent to $1.4762 as of 10:49 a.m. in London, after reaching the highest level since Jan. 4. That pushed its surge the past three days to 4 percent, the most since June 2009, and erasing its 2016 decline.

For a look at how gamblers see the referendum, click here.

The U.K. currency has been whipsawed before the referendum amid concern that a decision to leave the world’s-biggest trading bloc would spark market turmoil globally. A measure of the pound’s volatility versus the dollar over the coming week fell 2.3 percentage points to 37.1 percent, still remaining well above its five-year average of 7.8 percent.

A survey of 800 people by ORB for the Daily Telegraph had “Remain” at 53 percent and “Leave” at 46 percent among those certain to vote, once “don’t knows” were stripped out. In contrast, a YouGov poll of 1,652 voters for the Times newspaper published late on Monday showed “Leave” at 44 percent and 42 percent for “Remain.”

Billionaire investor George Soros, who made $1 billion betting on a devaluation of the pound in 1992, became the latest high-profile business or political leader to warn about the economic dangers of leaving the EU, saying the pound may slump more than 20 percent against the dollar. Such a devaluation would be bigger and more disruptive than when he profited from betting against the currency in 1992.

Credit:Bloomberg