Daily Afternoon Report 20.06.2016

The dollar remained broadly lower against the other major currencies in subdued trade on Monday, as concerns over a potential British exit from the European Union, or Brexit, eased, continued to boost market sentiment.

The dollar remained sharply lower against the pound, with GBP/USD up 2% at a three-week high of 1.4646.

Brexit concerns subsided after two opinion polls published on Saturday showed that support for the ‘Remain’ campaign had regained its lead over a vote to leave, while a third showed momentum shifting in favor of a vote to remain in the 28 member bloc.

Campaigning for the June 23 referendum resumed on Sunday after a three-day break prompted by the killing of pro-EU British lawmaker, Jo Cox.

EUR/USD climbed 0.58% to a one-and-a-half week high of 1.1342.

The greenback remained under pressure after the Federal Reserve left interest rates on hold last week and lowered forecast for how much they expect to hike interest rates in the next few years.

Investors were now eyeing testimony on monetary policy by Fed Chair Janet Yellen, due on Tuesday and Wednesday.

USD/JPY rose 0.30% to 104.49, moving away from the almost two-year low of 103.53 hit last Thursday, while USD/CHF held steady at 0.9595.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.95% at 0.7465 and with NZD/USD rallying 1.09% to 0.7117.

Elsewhere, USD/CAD slid 0.67% to trade at 1.2809, the lowest since June 13.

Commodity currencies found support as the boost in risk appetite pushed oil prices higher on Monday.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.69% at 93.64, the lowest level since June 9.