Pound fluctuates on mounting Brexit concerns
On Tuesday, the British pound fluctuated close to its two-month minimum against the US dollar, while Japan’s currency hovered near its six-week peaks against the greenback, following concerns that the United Kingdom might leave the EU soon.
Two recent opinion surveys have demonstrated a definite lead for the “Leave” campaign, in spite of the fact the vast majority of market participants are quite skeptical regarding the upcoming polling. Nevertheless, recent poll results can’t be neglected as they point out to an obvious leave momentum.
The British pound dropped 0.6%, trading at $1.4185, thus edging back in the direction of a two-month minimum of about $1.4117 hit on Monday.
Though those opinion surveys didn’t appear to be reliable enough in the case of Scotland’s referendum on its independence, financial markets have been recently swayed by them, as some financial analysts point out.
As market participants readied for another sink in the pound by purchasing sterling options, implied volatilities have surged this week.