Sterling is getting crushed once again on Tuesday, as currency traders react to ever increasing odds that the UK will vote to leave the European Union when it goes to the polls in just over one week.
Around 8:45 a.m. London time the pound is lower by around 0.8% against the US dollar to trade at $US1.4154, having fallen by more than 1% earlier in the day, as Brexit jitters intensify in the markets. Here’s a look at how sterling is performing so far:
The big driver of Tuesday’s sterling fall is the release of a poll on Monday night which showed another substantial lead for the Leave campaign. The online and telephone poll, conducted by ICM on behalf of the Guardian has the split at 53% for Leave, 47% for Remain.
“These results are consistent with the generality of numbers over the last couple of weeks, in which there has been some weakening in the remain position,” Professor John Curtice who runs the polling aggregation site whattheukthinks.com said.
Also pushing the pound lower is the British newspaper The Sun coming out in favour of Brexit. The paper, which has the biggest circulation of any physical paper in Britain, has an amazing track record in elections, and in general elections has always backed the winner. Should that success continue during the referendum, it looks like Britain will leave the European Union.
While sterling is currently getting slammed, it is also incredibly volatile, with one-month sterling volatility – a measure of how much the British pound is expected to fluctuate in the coming month – hitting its highest level of all-time on Monday, soaring to 26%, more than the previous all-time high of around 25%, reached during the global financial crisis.
It is expected that should Britain choose to back Brexit, the pound would crash, potentially dropping to its lowest level in more than 30 years, according to a survey of economists released by Bloomberg on Monday.