Investing.com -- GBP/USD rallied more than 1% on Friday, as momentum surrounding the "Leave" campaign slowed for the time being after officials suspended Brexit-related activities for a second straight day following the tragic murder of a British Parliament member.
The currency pair traded in a broad range between 1.4199 and 1.4388 before settling at 1.4207, up 1.10% on the session. With the sharp gains, the Pound Sterling enjoyed its strongest one-day move against the dollar in more than a month. At session-lows on Thursday, the pair tested 1.40, its lowest level since early-March. The Pound has still slid more than 1.25% over the last week amid mounting concerns that voters could support a referendum to leave the European Union next Thursday.
GBP/USD likely gained support at 1.3852, the low from Feb. 26 and was met with resistance at 1.4693, the high from May 27.
On Friday, a series of events ahead of next week's Brexit referendum were cancelled, as U.K. residents continued to mourn Jo Cox, a Labour Party member who was shot and stabbed to death in North Yorkshire a day earlier. Cox, who was elected to the House of Commons last year, had openly campaigned for the "Remain" camp in recent weeks. It marked the first killing of a Parliament member in two decades. Out of respect for Cox, several public opinion polls and a report by the International Monetary Fund were delayed until the weekend.
Voters in the U.K. appear to be evenly split on whether to support a departure by the U.K. from the European Union. While the "Remain" campaign held as much as a 70-30 lead several months ago, the "Leave," vote has surged ahead in several prominent polls this week. Still, the British sportsbook Betfair helped assuage concerns of a Brexit by reporting that approximately 65% of the wagers it has handled have come in for the "Remain," side. In recent weeks, British prime minister David Cameron, Federal Reserve chair Janet Yellen, IMF managing director Christine Lagarde and Bank of England governor Mark Carney have warned of the serious ramifications a Brexit could have on global financial markets. On the other end, House of Commons Leader Chris Grayling, Culture Secretary John Whittingdale and former London mayor Boris Johnson have shown support for the Leave movement.
Meanwhile, investors continued to digest the Fed's decision earlier this week to leave the target range on its benchmark Federal Funds Rate unchanged at a level between 0.25% and 0.50%. At the same time, six members of the FOMC recommended one interest rate hike before the end of this year, up from one in March. Last December, the FOMC forecasted in its quarterly economic projections. that it could raise rates as much as four times in 2016.
St. Louis Fed president James Bullard said Friday that the U.S. central bank may only need to raise rates once over the next two and a half years, amid a historically low interest rate environment among other top central banks worldwide. By comparison, both the European Central Bank and the Bank of Japan left key interest rates in negative territory earlier this month. Bullard's comments represent a stark departure from his position less than a month ago when he argued at a speech in Singapore that keeping rates too low for an extended period could "feed into future financial instability."
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.50% to a one-week low of 94.17, before settling at 94.31. The index is down by more than 5% since early-December.
Yields on the U.S. 10-Year rose three basis points to 1.61%, bouncing off four-year lows from the previous session. Yields on the Germany 10-Year surged four basis points to 0.02%, earlier this week yields on German bunds turned negative for the first time on record.