Investing.com - Sterling fell to two-month lows against the dollar on Tuesday and the yen rose to fresh multi-year highs against sterling and the euro amid mounting fears over the prospect of a British exit from the European Union.
GBP/USD was down 0.95% at 1.4132, holding just above Monday’s two-month trough of 1.4114.
The pound remained under heavy selling pressure as a number of opinion polls showed that the EU referendum race is tightening ahead of the June 23 Brexit vote.
Market sentiment has been hit by fears that Brexit could trigger a period of uncertainty in financial markets and hit growth in the region.
A poll conducted by YouGov for The Times newspaper published late Monday showed that the Leave campaign held 46% support compared with 39% support for the Remain camp. Undecided voters totaled 11%.
An ICM poll for the Guardian newspaper found that 53% supported the Leave campaign compared with 47% support for remaining.
Meanwhile, data from betting odds supplied from Betfair on Tuesday indicated that the implied probability of a Remain vote fell to 59%, down from 78% last week.
Sterling was also weaker against the euro, with EUR/GBP advancing 0.47% to 0.7960, closing in on Monday’s two-month highs of 0.7985.
The safe-haven yen, which tends to be bought by investors in times of market uncertainty, rose to multi-year highs against sterling and the euro.
GBP/JPY dropped 1.24% at 149.57, the lowest level since mid-August 2013.
EUR/JPY fell to lows of 118.90, the weakest since February 2013 and was last at 119.11, down 0.7% for the day.
Japan’s Finance Minister Taro Aso on Tuesday reiterated a warning against fresh strength in the yen, saying officials would "firmly respond” to prevent speculative moves in the foreign exchange market from persisting.
Aso also said he would closely watch the Brexit referendum next week, given its potential to disrupt global financial markets.
The yen was trading at almost six-week highs against the dollar, with USD/JPY down 0.3% at 105.95.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.29% at 94.69.