Sterling falls as anti-EU side tops Brexit opinion poll

Sterling dropped yesterday to its lowest level for one week after two opinion polls suggested the anti-EU campaign was gaining ground ahead of the Brexit referendum on June 23rd.

Investors have been trading on the basis that British people will vote to remain in the EU, but phone and online polls by ICM for the Guardian put the "Leave" campaign in front by three percentage points after earlier surveys suggested the two sides were neck-and-neck.

Amid deepening referendum tensions within the Tory administration of prime minister David Cameron, such findings and month-end selling led the British currency to fall against all but one of 16 major peers.

The campaign has set Mr Cameron and chancellor George Osborne against prominent “Leave” campaigners and one-time party allies such as Boris Johnson and Michael Gove, the justice secretary.

Against the US dollar the pound fell 0.6 per cent to $1.4552 as markets closed in London, the biggest drop since May 20th. Against the single currency, it weakened 0.5 per cent to 76.48 pence. A gauge of sterling’s one-month volatility versus the dollar climbed 18.38 per cent, the highest since 2009.

In the previous fortnight, sterling was the best performing Group-of-10 currency as investors took heart from polls showing a clear lead for the “Remain” campaign.