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

* Pound rises to 1.5 percent to 6-mth high

* Euro gets a lift from sterling's rise

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

By Anirban Nag

LONDON, June 23 (Reuters) - Sterling hit a 2016 high against the dollar on Thursday after the latest opinion poll favoured Britain staying in the European Union and bookmakers odds indicated a further shift towards the "Remain" camp, as voting got underway.

An Ipsos MORI poll for the Evening Standard, conducted on Tuesday and Wednesday, showed 52 percent of British voters would opt for remain while 48 percent would opt to leave. Earlier polls by ComRes and by YouGov (LSE: YOU.L - news) showed a last-minute rise in support for Britain to remain in the EU.

The implied probability of a vote to remain in the European Union was at 86 percent, according to Betfair betting odds. It was at around 60 percent last Thursday before the killing of pro-EU lawmaker Jo Cox seemed to have somewhat shifted sentiment towards the "Remain" camp.

Reduced Brexit fears have helped sterling gain roughly 4 percent this week, although given the vote is still too close to call there is an element of caution. The level of uncertainty is embedded in the options market, where overnight sterling implied volatilities are marked as high as 125 percent amid very thin liquidity conditions. It (Other OTC: ITGL - news) dropped towards 40 percent around mid-day as the currency rallied.

The pound surged 1.5 percent to $1.4931 its highest since December 2015 while gilt futures, seen as a safe-haven, extended losses.

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

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.

"If polls after the vote closes suggests that "Leave" is in front, then we could see sterling drop. These are very challenging conditions," said Yujiro Goto, currency strategist at Nomura.

WAIT AND SEE

A wait-and-see mood was expected to prevail through most of the day, dotted by possible bouts of volatility, as markets nervously await the results.

"It will be hard for the market move until the poll results are released. 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 (LSE: BARC.L - news) .

The dollar was up 0.8 percent at 105.16 yen after moving the previous day in a narrow 104.855-104.310 range.

The euro extended gains, rising 0.8 percent to $1.1390 . A slight ebb in prospects of Britain leaving the EU has helped the common currency. (additional reporting by Shinichi Saoshiro; Editing by Ralph Boulton)