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Pound slumps as British poll renews 'Brexit' fears

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The pound slumped on Tuesday after a newspaper poll showed an edge for voters who want Britain to leave the European Union.

[NEW YORK] The pound slumped on Tuesday after a newspaper poll showed an edge for voters who want Britain to leave the European Union.

The Telegraph said its new poll found 52 per cent of the people planning to vote in the June referendum support "Brexit".

The pound shed 1.1 per cent against the dollar, trading at US$1.4151 around 2100 GMT.

"The fact that the Brexit issue effectively remains a toss-up in UK politics is worry enough for the market to keep cable under pressure for the time being," said Boris Schlossberg of BK Asset Management.

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The dollar was little changed against the euro at US$1.1110 per euro.

The yen strengthened after the Bank of Japan stood pat on monetary policy, as expected. It climbed 0.6 per cent on the greenback and 0.5 per cent on the euro.

Attention focused on the Fed's policy arm, the Federal Open Market Committee, as it opened a two-day meeting that concludes on Wednesday with a policy statement and a news conference with Fed Chair Janet Yellen.

Markets expect the FOMC will leave the benchmark federal funds rate at 0.25-0.50 per cent after lifting it in December for the first time in nine years.

The Fed also will release new forecasts for growth, inflation, employment, and interest rates.

"While we do not anticipate a rate hike at this meeting, we do expect the Fed to signal three 25 basis point increases for this year, which is more than priced in by financial markets," said Harm Bandholz of UniCredit.

"Fundamentally, the US economy is currently certainly not in a weaker position than it was three months ago."

AFP

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