Pound Hits Three-Week Low On New Brexit Polls

The pound has fallen to a three-week low against the dollar, after two new polls reveal support for the Leave campaign is increasing.

A YouGov (LSE: YOU.L - news) poll showed 45% of voters favoured Brexit, compared to 41% voting Remain, while an Observer/Opinium poll gave Vote Leave a three-point lead.

This sent the pound plummeting by as much as 0.9% to $1.435 - and by lunchtime on Monday, sterling had climbed back up two-thirds of a cent to $1.441.

The slump came hours before the chairwoman of the US Federal Reserve, Janet Yellen, warned an Out vote could have "significant economic repercussions" and cause further turbulence in financial markets.

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Elsa Lignos, a senior currency strategist at RBC (Other OTC: RBCI - news) , told Sky News that Brexit is "the only thing that matters anymore for sterling".

According to trading platform IG (LSE: IGG.L - news) , more money is being staked on an Out vote than an In vote for the first time.

"It (Other OTC: ITGL - news) is becoming extremely worrying for the financial markets and we expect more sterling losses if polls continue to indicate a Brexit lead," said Hussein Sayed, chief market strategist at online broker FXTM.

But Boris Johnson appeared to shrug off concerns over the falling pound, saying: "The pound will go where it will over the short term. But believe me, in the long term you can look forward to fantastic success for this country."

Craig Erlam, senior market analyst at Oanda, warned more currency volatility is likely over the coming weeks.

He said: "With (Other OTC: WWTH - news) both sides likely to step up their game over the next couple of weeks, I imagine we'll see a lot more volatility in the pound, and the closer the polls get, or if Vote Leave continues to push ahead, the pound may find itself back towards April's lows before too long."

Several experts, including Bank of England governor Mark Carney, have warned that the value of sterling could plummet in the event of a Leave vote.