Sterling stays ahead as traders bet on Remain vote in UK's EU referendum
Sterling remained ahead despite easing back from a fresh 2016 high as traders continued to bet on Britain voting to remain in the EU.
The pound hit 1.49 US dollars during the day on Thursday, building on its rise all through the week after opinion poll data showed a narrow lead for the Remain camp.
In the late afternoon it dropped back to a 0.1% rise to 1.48 US dollars.
It comes as the final poll of the referendum campaign pointed to a marginal lead for the Remain camp.
The Ipsos Mori survey for the Evening Standard showed the referendum result was on a knife-edge, with 52% wanting to stay in the European Union and 48% pushing for Brexit.
However, experts believe that it is the bookmakers' odds that currency traders are following.
FXTM chief market strategist Hussein Sayed said: "The markets are being completely reliant on the predictions from the bookies, which strongly expect Remain to win the referendum. If history is any indication, the bookmakers will get it right.
"They got it right on the general election last year, and on the Scottish referendum in September 2014, which made them a more reliable source than the polls."
The pound has now surged by 4% over the past seven days, helping it reclaim all its losses seen since the start of the year. On Monday, sterling notched up its biggest one-day gain against the dollar for nearly eight years.
Currency analysts expect volatility whichever way the vote goes.
Senior analyst Chris Saint, at Hargreaves Lansdown currency, added: "Clearly the key issue now for currency markets is whether rising expectations that the status quo will prevail are well-placed.
"Most of the results from the local counting areas are expected by the early hours of tomorrow morning, with the official outcome anticipated by around breakfast time.
"Dramatic exchange rate swings are to be expected regardless of the result, with a sharp drop in the pound's value possible in the event of a Brexit."
Famous currency trader George Soros said on Tuesday that a vote to leave the EU would trigger a plunge in the pound greater than Black Wednesday in 1992, when sterling slumped 15%.
