FOREX-Sterling hits 2016 high on bets Britain will stay in EU

* Pound rises to 1.5 percent to 6-mth high

* Euro gets a lift from sterling's rise, hits 6-week high

* Wide swings expected once UK verdict is out (Updates after latest opinion poll)

By Anirban Nag

LONDON, June 23 (Reuters) - Sterling hit a 2016 high and the euro surged against the dollar and yen on Thursday after a series of late opinion polls favoured Britain staying in the European Union and bookmakers odds indicated a further shift towards the "Remain" camp.

An Ipsos MORI poll for the Evening Standard, conducted on Tuesday and Wednesday, showed 52 percent of British voters would opt to remain while 48 percent would opt to leave. An online Populus poll showed support for an "In" vote at 55 percent.

Earlier polls by ComRes and by YouGov (LSE: YOU.L - news) also showed a last-minute rise in support for Britain to remain in the EU. Sterling rose 1.5 percent in morning trade in London to top $1.49 for the first time this year.

"The market is clearly now pricing in, with near certainty, a "Remain" vote... I do think a "Remain" vote is more likely, but not with the degree of certainty that appears to be now priced," said Adam Cole, head of G10 currency strategy at RBC Capital Markets.

The pound, and to a lesser extent the euro, have been buffetted since February, by opinion poll results which have swung from predicting a clear victory for the government-led "In" camp to a narrow vote for a "Brexit".

Odds on the Betfair betting exchange have slumped from 40 percent last Thursday before the killing of pro-EU lawmaker Jo Cox to just 14 percent on Thursday. But the final polls still remain within the margin of error.

"The early results are potentially going to be very confusing," Cole said. "If this is the starting point (with which) we go into the 10 o'clock polls and the results, there's a lot of scope of volatility, to the downside."

Sterling is up around 4 percent this week but the options market shows record levels of uncertainty about its fate over the next 24 hours. Overnight sterling implied volatilities were quoted as high as 125 percent, levels at which traders said it was effectively impossible for fund and corporate buyers to trade. It dropped towards 40 percent around mid-day as the currency rallied.

Voting will end at 2100 GMT (2200 BST), with results expected early on Friday. Pollster YouGov will publish a poll of how people have voted shortly after polling stations close, hoping to repeat its successful prediction of the 2014 Scottish independence vote.

Banks have warned clients about volatile trading conditions around the results which may lead to large gaps in prices. Barclays (LSE: BARC.L - news) stopped accepting new "stop loss" orders as of 0600 GMT, an extremely rare move for one of the big six banks that dominate the world's biggest financial market.

"These are very challenging conditions," said Yujiro Goto, currency strategist at Nomura, warning of a sharp fall in sterling if there are signs of a "Leave" vote after polls close.

IMPROVING RISK SENTIMENT

Rising expectations that Britain would vote to stay in the EU bolstered overall risk sentiment, helping higher-yielding currencies and dampening demand for safe-haven currencies like the yen and the Swiss franc.

Nevertheless, nervousness is expected to prevail for the next 24 hours as liquidity stays on the lower side. That is likely to lead to wild swings in most currency pairs.

"The pound will take centre stage. But other European currencies and particularly dollar/yen also bear watching as the pair will reflect swings in risk sentiment," said Shin Kadota, chief Japan FX strategist at Barclays.

The dollar was up 1.3 percent at 105.86 yen, while the euro jumped 2 percent to a two-week high of 120.91 yen. The single currency hit a six-week high of $1.1422, moving in sympathy with the rising British pound. (additional reporting by Shinichi Saoshiro; Editing by Toby Chopra; Editing by Ralph Boulton)