Sterling has continued its sharp decline this morning as another set of opinion polls showed the Leave side pulling ahead with just nine days to go until the EU referendum.
The pound has lost 1.1 per cent against the US dollar so far today to stand at $1.4117 in early afternoon trading - a two-month low. It also fell against the euro by 0.4 per cent at €1.2579, despite weakness in the currency exemplified by the fact that German 10-year bonds turned negative for the first time in history.
The latest fall was triggered by a YouGov poll out last night which put the Leave side seven points ahead of Remain. That was a six point swing from their previous survey and comes after ICM also showed the Leave side could be extending its lead, up from four to six points after stripping out those who are undecided.
The overnight losses mean the pound has shed four cents against the dollar in the space of seven days - sharp volatility in a market which usually moves in fractions of a per cent.
Betting markets also shifted dramatically on the latest poll, with Leave odds coming in at their shortest ever price. Punters can receive a best price of just 11/8 on the UK voting to Leave the EU - an implied probability of 42 per cent - compared to 9/4 (31 per cent) over the weekend.
The FTSE 100 also plunged by more than one per cent in the first two hours of trading, crashing below the 6,000 mark for the first time since February.
Quite the move on the @IGcom Brexit binary - now 41.5% chance of an 'OUT' vote, up from c. 32% yesterday.— Chris Beauchamp (@ChrisB_IG) June 14, 2016
Off the back of global uncertainty, investors rushed to safer havens. Yields on the benchmark 10-year German bund turned negative for the first time this morning, before settling at zero per cent. Borrowing costs for the UK government also tumbled to 1.18 per cent, down from around 1.4 per cent this time last month.
The next benchmark for sterling will be the lows of $1.38 reached in February around the time David Cameron set the date for the 23 June referendum.
Economists polled by City A.M. said they expect sterling to hold around $1.40 before the vote, though for some that prediction was based on the Remain camp extending its lead in the opinion polls.