FX round-up: Dollar drifts lower ahead of referendum

Cable edged higher ahead of the EU referendum, with some market commentary highlighting increased confidence from traders that a Brexit will finally be avoided, which left investors free to focus on reduced prospects for interest rate hikes on the other side of the Pond.

The pound was gaining 0.2% to 1.4736 as of 22:05 BST even after the results of two polls published after the close of trading in London revealed a lead for 'Remain'.

The last online poll of voting intentions from TNS before Thursday's EU referendum showed 43.0% of respondents backed 'Leave' against 41.0% who said they supported 'Remain'.

Nonetheless, using a turnout model from the last general election the pollster concluded that 'Leave' could expect to garner 49.0% of the vote, against just 42.0% for 'Remain', Bloomberg reported.

On Wednesday, Yellen reiterated remarks made in the previous day to Congressmen that “we cannot rule out the possibility expressed by some prominent economists that the slow productivity growth seen in recent years will continue into the future.”

Euro/dollar closed up by 0.19% at 1.1317 although US dollar/yen strengthened 0.18% to 104.58.

Over previous sessions, some market commentators had speculated out loud that volatility would be most intense in the yen crosses once the result of the referendum was known.

The US dollar spot index slipped 0.30% to 93.73.

Significantly, in its Article IV consultation with the US the International Monetary Fund expressed a positive a positive view on the outlook for the economy but cautioned the dollar might be overvalued by between 10.0% to 20.0%.