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Pound breaks $1.50 on hopes of a Remain victory | |
(about 1 hour later) | |
The pound hit $1.50 for the first time since December on hopes that the UK has voted to remain in the European Union. | |
Sterling was given a boost after Leave campaigner Nigel Farage said it looked as though Remain had "edged" the vote. | |
Last week the pound fell as low as $1.40 as traders tracked polls suggesting a flagging Remain campaign. | |
Earlier the FTSE 100 closed 1.2% higher to a two-month high of 6,338.1 points, with miners, banks and travel firms rising. | |
Wall Street also jumped in late trading, with the Dow Jones and S&P 500 both closing 1.3% higher. | Wall Street also jumped in late trading, with the Dow Jones and S&P 500 both closing 1.3% higher. |
That was the best result for New York shares in a month, with the main measure of "fear" - the VIX volatility index - falling 18.5%, the biggest slide in six months. | That was the best result for New York shares in a month, with the main measure of "fear" - the VIX volatility index - falling 18.5%, the biggest slide in six months. |
'Dramatic' swings | 'Dramatic' swings |
Peter Cardillo, at First Standard Financial in New York, said: "The markets are the best judge of what is going to happen, and they are saying that Britain will remain. | |
"The key is the strong jump in the pound." | |
Chris Saint, senior analyst at HL Currency, said: "The key issue now for currency markets is whether rising expectations that the status quo will prevail are well-placed. | |
"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." | |
European markets earlier added to the optimism, with the Dax in Frankfurt and the Cac 40 in Paris rising 1.8% and 2% respectively. | European markets earlier added to the optimism, with the Dax in Frankfurt and the Cac 40 in Paris rising 1.8% and 2% respectively. |
Brent crude rose sharply in late trading to end the day 2.1%, or $1.03 higher at $50.91 a barrel, while US crude added 98 cents to $50.11. | |
Higher oil prices bolstered shares in Shell, which closed up 3.1% in London, while BP was almost 1% higher. | Higher oil prices bolstered shares in Shell, which closed up 3.1% in London, while BP was almost 1% higher. |
Gold, regarded as a safe haven, fell 0.6% to a two-week low of $1,258.86 an ounce. | Gold, regarded as a safe haven, fell 0.6% to a two-week low of $1,258.86 an ounce. |
Thursday winners | Thursday winners |
The biggest riser on the London market was British Airways owner IAG, whose shares rose 3.6% to 528p as traders expected aviation to be helped by a remain vote. | The biggest riser on the London market was British Airways owner IAG, whose shares rose 3.6% to 528p as traders expected aviation to be helped by a remain vote. |
London Stock Exchange Group ended 3% higher as its £21bn merger with Deutsche Borse looked more certain of going ahead. | London Stock Exchange Group ended 3% higher as its £21bn merger with Deutsche Borse looked more certain of going ahead. |
Saxo Bank's head of FX strategy, John Hardy, said: "Everybody is a bit shell-shocked at the way the market has moved so aggressively (toward the UK remaining in the EU). | Saxo Bank's head of FX strategy, John Hardy, said: "Everybody is a bit shell-shocked at the way the market has moved so aggressively (toward the UK remaining in the EU). |
"If you are stuck with a short position, you are being forced out without even knowing the result, but what this also means is that a Brexit result is now a catastrophic risk." | "If you are stuck with a short position, you are being forced out without even knowing the result, but what this also means is that a Brexit result is now a catastrophic risk." |