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English pound soars on easing Brexit fears

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The English pound soared against the US dollar and euro on Monday on easing fears that Britain will vote to break with the European Union, as recent polls showed growing support for staying in the EU.

[NEW YORK] The English pound soared against the US dollar and euro on Monday on easing fears that Britain will vote to break with the European Union, as recent polls showed growing support for staying in the EU.

"Today's rally for the pound could be just the tip of the iceberg if Britain should vote to remain in the EU, an outcome that would remove a substantial amount of uncertainty that for months has weighed on the UK currency," said Joe Manimbo of Western Union Business Solutions.

Three days before the critical referendum, the pound jumped 2.3 per cent to US$1.4675. It surged roughly two per cent to 77.08 pence per euro.

Analysts cautioned that sentiment on Brexit likely would be volatile amid the heated rivalry of the campaigns, with the "leave" and "remain" camps running neck-and-neck, according to poll results released over the weekend.

The dollar meanwhile weakened against the yen as well.

Markets will also be on the watch for Federal Reserve Chair Janet Yellen's semiannual monetary policy report to Congress on Tuesday and Wednesday.

The US central bank stood pat on policy last Wednesday in part due to Brexit concerns, and lowered its path for US rate hikes.

"Chair Yellen may largely endorse a wait-and-see approach amid the uncertainties clouding the economic outlook, and more of the same from the central bank head may encourage market participants to push out bets for the next rate hike," said David Song at DailyFX.

AFP