Pound hits highest level of year as traders bet on Remain win

The pound hit its highest level of the year late on Wednesday as traders continued to bet on Britain voting to remain in the EU.

Sterling hit 1.48 US dollars, building on its rise all through the week after opinion poll data showed a narrow lead for the Remain camp. It has since eased to 1.47 US dollars.

However, experts believe that it is bookmakers' odds that currency traders are following.

FXTM chief market strategist Hussein Sayed said: "The markets are being completely reliant on the predictions from the bookies, which strongly expect Remain to win the referendum. If history is any indication, the bookmakers will get it right.

"They got it right on the general election last year, and on the Scottish referendum in September 2014, which made them a more reliable source than the polls."

The pound has now surged by 4% over the past seven days, helping it reclaim all its losses seen since the start of the year. On Monday, sterling notched up its biggest one-day gain against the dollar for nearly eight years.

Currency analysts expect volatility whichever way the vote goes.

Ana Thaker, market economist at PhillipCapital UK, said: "We are likely to see volatility ensue in sterling regardless of the outcome as markets ascertain what the long-term effects of either decision will be as both outcomes do not come without consequences."

Famous currency trader George Soros said on Tuesday that a vote to leave the EU will trigger a plunge in the pound greater than Black Wednesday in 1992, when sterling plunged 15%.