Pound drops more than 1% after weekend polls show Brexit favored

A passenger aircraft prepares to take off from London City Airport against a backdrop of Canary Wharf business, financial and shopping district in London, UK, on May 26.
A passenger aircraft prepares to take off from London City Airport against a backdrop of Canary Wharf business, financial and shopping district in London, UK, on May 26.PHOTO: BLOOMBERG

TOKYO/SINGAPORE (BLOOMBERG) - The pound slid to a three-week low as weekend polls showed Britons favored exiting the European Union, ahead of a referendum on June 23.

The UK currency weakened against all major peers on Monday (June 6) after an ITV poll found 45 per cent would choose 'Leave,' compared with 41 per cent picking 'Remain.' A TNS poll showed 43 per cent for 'Leave' and 41 per cent for 'Remain.'

The race has tightened in the past week, spooking some investors who had bet the country would vote to stay in the EU.

"If there's any one currency investors may want to go short on besides paring long dollar positions that would be sterling," said Vishnu Varathan, a Singapore-based economist at Mizuho Bank. "Sterling very much remains on the back foot."

The pound dropped as much as 1.1 per cent to US$1.4353, the lowest level since May 16, and was at US$1.4382 as of 8:30 am in Tokyo. It slid 0.8 per cent to 78.91 pence per euro, after reaching 79.06, the weakest since May 12.

The US dollar rebounded, after dropping Friday when the US government reported the weakest jobs growth in almost six years, leading traders to pare bets on Federal Reserve interest-rate increases. The Bloomberg Dollar Spot Index advanced 0.2 per cent to 1,182.74, after sliding 1.5 per cent at the end of last week.