Sterling holds steady against major currencies as flurry of EU referendum opinion polls eases

Jake Cordell
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Sterling was holding steady on Wednesday after a busy few days for the pound
Sterling was holding steady on Wednesday after a busy few days for the pound (Source: Getty)

The pound has held steady today after a frantic week in the foreign exchange markets as market-moving referendum news proved elusive and traders were able to catch their breath.

Sterling was up 0.3 per cent against the US dollar at $1.4590 at lunchtime, while it was unchanged against the euro at €1.2817.

Currencies have been at the forefront of the back-and-forth of the EU referendum campaign, with sterling moving by significant chunks in response to opinion polls. The general rule has been that a good poll for Remain sends the pound surging, while a good poll for Leave causes the currency to shed value.

Odds on the EU referendum were also unchanged today, with Remain a best price of 1/3 and Leave available at 5/2.

Experts and traders have been taken aback by the scale and predictability of the moves in sterling in response to the polls.

"Sterling appreciated uncontrollably, almost gasping for air during trading on Tuesday following the latest polls that have displayed a slight lead in the Bremain camp," Lukman Otunuga, reseaerch analyst at FXTM said.

Otunuga added that the $1.45 - $1.47 range remains crucial for the pound in the next two weeks. Closer to the top of that limit and profit-taking will kick in. The $1.45 mark, however, could act as a natural floor without any concrete referendum news but quickly become a new ceiling should a strong poll for Brexit push sterling down.

Read more: Is a weaker pound really that bad for the UK economy?

David Cameron and Remain campaigners have seized on the volatility in what they see as evidence that the economy would be rocked by a vote to leave. ​

Reports yesterday also suggested that foreign investors were pulling billions of pounds out of the UK in the run up to the vote, as capital outflows in sterling assets spiked to £59bn - or £1.3m a minute - in March.

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