FX round-up: Sterling falls on more Brexit fears as Yellen points to gradual US rate rises

Sterling turned in a downcast performance against most major crosses as fears heightened that Britain might vote to quit the European Union later in June, with Federal Reserve chair Janet Yellen today flagging the potential for gradual US rate rises.

At 17:10 BST, the British currency fell 0.45% to $1.4452, and was down 0.35% at €1.2729. This as more polls implied the UK would vote to leave the EU when it goes to the polling booths on 23 June.

Sterling also lost ground against commodity currencies the loonie, aussie, kiwi and rand as crude and metals prices firmed, but managed a minor rise on the yen. Crude prices were convincingly higher, as were precious and industrial metals.

"The Remain campaign is running out of global institutions to lean on with dire economic forecasts in the event of a Brexit," said market analyst Jasper Lawler of CMC Markets.

"The momentum could remain with the Leave camp over the next week or so," he added.

The latest polls -- Observer/Opinium, YouGov/ITV and TNS -- revealed 43%-45% of Britons favoured leaving the EU, versus 40%-41% wanting to stay part of the single-currency bloc.

Lawler said the Brexit debate had shifted from economics to politics, with the British public now looking for unanswered questions on immigration and lost UK sovereignty.

OANDA senior market analyst Craig Erlam noted that polls prior to the Scottish referendum or UK election had appeared to be not that accurate.

"The markets are going to remain very sensitive to them (Brexit polls) given the consequences that a vote to leave could have for the pound," he noted.

Meantime, the dollar managed gains against the euro, aussie, kiwi and yen, but lost traction against the loonie and rand. It remained hungover after last Friday's shock jobs data. The dollar-spot index was broadly flat at $94.018.

All ears were tuned into Yellen's comments early this evening at the World Affairs Council of Philadelphia.

She said that gradual rate hikes were likely on the way, adding "positive economic forces have outweighed the negative" for the US. She conceded that May's weak non-farm payrolls report required watching.

"If incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2 percent objective, as I expect, further gradual increases in the federal funds rate are likely to be appropriate and most conducive to meeting and maintaining those objectives," Yellen was reported by Reuters as saying.

Before Yellen took centre-stage, comments from three other Fed officials appeared to have a dovish hue.

Federal Reserve Bank of St Louis president James Bullard said he was leaning against endorsing a rate rise at the central bank's meeting on 15 June. "I'd rather move on the back of good news about the economy," he told The Wall St Journal.

Meanwhile, Federal Reserve bank of Atlanta president Dennis Lockhart said he would wait to see how the data came in over the next few weeks.

Federal Reserve bank of Boston president Eric Rosengren noted choppy economic data.

He added that it was "my expectation that economic conditions will continue to gradually improve, which in turn would justify further actions to normalize policy, continuing a gradual return to a more normal interest rate environment."