Pound Rises to Highest in 2016 Hours Before Brexit Vote Begins 

• Polls had indicated vote on EU membership is too close to call
• Foreign-exchange traders are bracing for heightened volatility

The pound climbed to the strongest level this year as the U.K. prepares to vote on membership of the European Union.

A gauge of sterling advanced for a second day before Thursday’s referendum after polls showed that the vote is too close to call. The pound strengthened against all 16 of its major counterparts. Voting booths open at 7 a.m. London time.

“There remains plenty of scope for volatility on either outcome,” Ray Attrill, global co-head of foreign-exchange strategy in Sydney at National Bank Australia Ltd, wrote in a note, citing polls that suggest the two sides running “almost neck and neck.”

Sterling rose 0.7 percent to $1.4801 as of 6:57 a.m. London time after reaching $1.4844, the strongest level since Dec. 31. The U.K. currency climbed 0.3 percent to 76.63 pence per euro. The yen weakened 0.2 percent to 104.65 per dollar.

Top Performer

The pound has appreciated 4.2 percent against the dollar in the past week, outperforming all its developed-market peers.

Among the other currencies moving on Thursday:

• Hungary’s forint, Norway’s krone, Mexico’s peso, the Polish zloty and Sweden’s krona all rose at least 0.5 percent against the dollar
• New Zealand’s currency reached a one-year high of 71.99 U.S. cents
• The Australian dollar touched the highest level since May 3

Sterling’s one-month implied volatility against the greenback has declined to 23.1 percent from a seven-year high of 29.5 percent reached on June 15. A JPMorgan Chase & Co. index of Group-of-Seven currency volatility has dropped to 11.4 percent, after closing at 12.79 percent on June 14.

Source: Bloomberg

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