Tuesday, June 14, 2016
BREXIT POLLS: The euro and the pound are diving as Britain still backs Leave
TOKYO (Reuters) - The British pound and the euro fell to their lowest level since 2013 against the yen on worries a UK referendum later this month could pull Britain out of the European Union, possibly disrupting European political and economic affairs.
The pound is down 1.61% to 150.10 against the yen at 11.25 a.m. BST (6.25 a.m. ET), its lowest level since August 2013.
Meanwhile, the euro is down 0.79% to 119.47 against the yen, a level not seen since early 2013.
Both currencies are falling ahead of the referendum next week on Britain's membership of the European Union. The latest polls by YouGov show the Leave campaign, which has been gaining momentum, still has a narrow lead. Leave is polling 43% to the Remain camp's 42%.
Investors fear that a so-called Brexit - Britain's exit from Europe - will cause financial and political ructions for not just Britain but the European Union too. That's why currency traders are ditching the pound and euro and turning to the yen, which is seen as much more stable at the moment.
The pound is also diving against the dollar on Monday morning too. Sterling is down 0.71% to 1.4154 at 11.30 a.m. BST (6.30 a.m. ET), its lowest point since early April.
FXPro's chief economist Simon Smith says in an email this morning: "All the price action seen during the Asia session has been indicative of markets hunkering down and reducing risk."
CMC Markets' chief market analyst Michael Hewson says in an emailed statement this morning:
This shift in sentiment away from the complacency just over two weeks ago when it was widely expected that the "remain" camp would probably carry the day, has spooked already anxious markets, already concerned about further slowdowns in global economic growth particularly in light of recent weak economic data out the US, China and Japan.
(Reporting by Editing by Eric Meijer)