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Dollar remains lower vs. rivals in cautious trade

Published 06/22/2016, 08:16 AM
© Reuters.  Dollar holds onto losses as Brexit uncertainty remains
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Investing.com - The dollar remained lower against the other major currencies on Wednesday, as investors were cautious after recent polls showed that the race between the Leave and Remain campaigns is still tight one day before the vote on a potential British exit from the European Union, or Brexit.

GBP/USD rose 0.20% to 1.4684, just off Monday’s six-month highs of 1.4782.

An opinion poll on Tuesday showed that the campaign for the U.K. to stay in the EU lost some of its lead ahead of Thursday’s vote.

The Survation poll showed that 45% of voters supported the campaign to remain in the EU, with 44% supporting Brexit, as a vote to leave is known. 11% were undecided.

This compared to the 45% voting for remain and 42% voting to leave in an earlier survey.

Two opinion polls released on Monday indicated that support for the Remain camp had regained its lead after falling behind last week.

The dollar erased gains posted on Tuesday after Federal Reserve Chair Janet Yellen said that gradual interest rates hikes were likely to be needed, during her testimony to Congress.

She added that the Fed is “closely monitoring global economic and financial developments” and taking a cautious approach to raising interest rates.

Yellen also warned that a vote by Britain to exit the EU could have significant economic repercussions.

EUR/USD gained 0.34% to 1.1278.

The euro remained supported after European Central Bank President Mario Draghi said on Tuesday that the ECB is ready for “all contingencies” following the Brexit referendum.

The dollar was lower against the yen and the Swiss franc, with USD/JPY down 0.18% at 104.56 and with USD/CHF shedding 0.21% to 0.9603.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.63% at 0.7498 and with NZD/USD climbing 0.58% to 0.7164.

Elsewhere, USD/CAD fell 0.33% to trade at 1.2773.

The commodity currencies strengthened as oil prices regained some ground after the American Petroleum Institute said on Tuesday that U.S. oil stocks fell more than expected last week.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.29% at 93.89.

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