FX round-up: Sterling endures torrid turn on resurgent Brexit fears

Sterling put in torrid turns on most major crosses today as resurgent Brexit fears flooded across global markets, and traders looked keenly ahead to UK, US and Japan central-bank fixtures later this week.

At 17:35 BST, the great British currency was down 0.28% to $1.4217, down 0.55% to €1.2604 and off 1.07% to 150.910 yen. It fell against the loonie, aussie, kiwi and rand, too.

FXTM research analyst Lukman Otunuga said market fears of Britain voting to quit the European Union on 23 June had spawned a contagion that haunted investor attraction towards sterling.

"Volatility has intensified to unfathomable levels while uncertainty nears a peak following the conflicting polls which continue to leave the majority of investors on edge," Otunuga said.

At 17:42 BST, UK 10-year gilt yields had tighted 2 basis points to 1.21%, while gold was ahead 0.9% to $1287.40 an ounce.

Behind this race to safety were a string of polls that increasingly suggested a Brexit from the economic bloc was a potential outcome.

Wagering outfit Betfair said today that the implied probability of Britain voting to stay in the EU fell to as low as 64%, down from last Thursday's 78%. Other polls -- by ORB/Independent and separately Financial Times -- showed a leave vote in the leave.

"The pound is coming under considerable pressure again today on the back of the gap in the betting odds being closed," said OANDA senior market Craig Erlam.

He added sterling might yet hit fresh year lows even before the vote. Key cable support was about $1.40, "for now".

A Bloomberg survey of 20 economists saw sterling tumbling to $1.35 on a Brexit outcome, with a Bremain decision would see it pushing up to $1.5.

A drop to between $1.30-$1.35 a day after a Brexit result was the average opinion from the poll, with a $1.45-$1.50 range seen in a Bremain scenario.

Rabobank added that should the Brexit scenario materialise, "the 2009 low at $1.3503 will be the initial target for the GBP/USD bears."

Meantime, at 17:35 BST, the dollar had also turned in a downcast performance, but less so than sterling. It fell 0.25% to €0.8866 and losing 0.77% to 106.15 yen. It also fell against the commodity units. The dollar-spot index was lower 0.18% to $94.398.

Markets were already looking ahead to Wednesday night's US Federal Reserve rates call, and consensus -- noting increasingly dovish jawboning by officials, and the shock non-farm payrolls data -- is for it to remain unchanged.

On Thursday, Bank of England is expected to hold its benchmark rate and quantitative easing programme unchanged, with Bank of Japan anticipated to stand pat on rates this week.

"But markets are prepared for a (BoJ) surprise given the significant strengthening we've seen in the yen and the weakness in the economy and the inflation data that prompted (Prime Minister) Shinzo Abe to delay the sales tax hike for two and a half years," said Erlam.