Pound weakens amid signs of Brexit camp gaining ground

Bloomberg

The pound weakened amid signs that support for the campaign for Britain to leave the European Union had increased.
Sterling fell against most of its major peers as Bookmaker William Hill Plc said 85 percent of all EU referendum bets taken over Monday’s public holiday in the U.K. were in favor of Britain exiting the bloc, and that the odds for a Brexit increased.
An ORB poll for the Daily Telegraph newspaper showed 51 percent of definite voters surveyed supported remaining in the bloc, and 46 percent wanted to leave. This was a narrower lead for the remain camp than in ORB’s previous poll.
“Overnight and over the weekend it seems to me that the news was rather pro-Brexit, i.e. pound-negative,” said Esther Reichelt, a Frankfurt-based currency strategist at Commerzbank AG. “Recent polls are much closer, and I simply don’t think that it is warranted to be too sure about the expected outcome of the referendum.”

Government Warnings
The U.K. currency had been boosted in the previous two weeks as an increasing number of surveys indicated the pro-European vote was gaining strength. Sterling was the best performer in that period among its Group-of-10 peers amid speculation the risk of Brexit was receding. The Bank of England and the Treasury said that a vote to leave could spark a recession.
The pound depreciated for a second day against the single currency, weakening 0.1 percent to 76.19 pence per euro. It was little changed at $1.4643.
A gauge of the pound’s one-month volatility versus the dollar climbed to a new six-year high, as traders paid more for bets to lock in prices for the currency pair through options.