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Pound drops off due to latest polls

• Posted by Shyam Gokani in Uncategorised
• April 28, 2016
• No Comments

Sterling rose against a weaker dollar on Thursday, advancing towards 12-week highs against a U.S. currency pegged back by expectations that the Federal Reserve is unlikely to raise interest rates any time soon.

Still, gains in the pound are likely to be capped after a fresh YouGov poll for the Times showed that those campaigning for Britain to exit the European Union in a referendum in June were gaining ground.

The online survey taken on Monday and Tuesday showed for the “Out” campaign had risen 3 percentage points to 42 percent since a similar survey on April 12-14, while support for the “In” campaign had risen 1 percentage point to 41 percent.

The dollar was lower across the board after the Federal Open Market Committee hinted it was in no hurry to tighten monetary policy amid an apparent slowdown in the U.S. economy.

While the pound got some relief from the Fed’s policy stance, investors remain wary about putting huge bets in sterling’s favour. They worry that a vote for Britain to leave the European Union on June 23 would leave the country exposed to a slide in the pound, raise the cost of financing its huge public debt and undermine a shaky economic recovery.