Article by ForexTime
As the “leave” campaign gathers momentum, based on recent Brexit polls, the one-month implied sterling volatility (the price of insuring against swings in the pound against the dollar) has surged to the highest in eight years. This highlights the nervousness ahead of the upcoming British vote on EU membership on the June 23.
The possibility of a UK exit from the EU is rippling through markets, after a series of polls in recent weeks showing a big swing in favour of Brexit.
Markets are starting to price in some chance of the potential for a vote to leave the EU. Consequently, risk aversion has dominated markets and has led to a rush to safe haven assets like the yen, gold and government bonds and the pound has come under pressure.
The Japanese yen strengthened 0.2 per cent against the US dollar, pushing USDJPY to 106.03 yen. On Monday the pair fell to the 105 yen handle mark for the first time since May 3.
On Tuesday, yields safe haven on Japanese government bonds ranging from 10 to 30 years fell to fresh record lows, with the benchmark 10-year JGB yielding minus 0.17 per cent.
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Gold traded at $1,279.95 an ounce in Asia today, after having risen to $1,287.04 on Monday as the global stock sell-off revived its haven appeal.
Article by ForexTime
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