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Pound, euro push higher ahead of knife-edge Brexit vote

Thursday, June 23, 2016 - 06:51
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The British pound and the euro both strengthened on Wednesday on the eve of Britain's European Union referendum, amid market hopes that voters will opt to remain in the bloc.

[NEW YORK] The British pound and the euro both strengthened on Wednesday on the eve of Britain's European Union referendum, amid market hopes that voters will opt to remain in the bloc.

The "Leave" and "Remain" sides were virtually even in polls the day before Thursday's vote, and markets were girded for shock if the "leave" camp wins.

Breaking with the European Union, economists have warned, could cause significant economic disruption, especially in trade, for both sides and sharply slow the British economy in the short run.

At 2100 GMT, the pound was up 0.7 per cent to US$1.4737, at the high end of the narrow trading for the pair since the beginning of the week.

Likewise, the euro added 0.5 per cent against the US dollar to US$1.1313.

The dollar's relative weakness, despite its clear safe-haven attraction in the Brexit vote, was due in part to the bearish tack of Federal Reserve Chair Janet Yellen in two days of testimony to Congress on Tuesday and Wednesday.

She said the US economy faces "considerable uncertainty" and sounded less confident in a rebound in inflation and further strengthening of the US employment market than she had a month ago.

AFP

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