Gold Falls Amid Easing Brexit Concerns

 | Jun 21, 2016 04:48AM ET

The sterling surged more than 2% against the dollar to reach near one-month highs on Monday, as public sentiment shifted against a potential Brexit, as concerns related to the U.K.'s possible departure from the European Union continue to ease. In the euro area, major stock indices soared on Monday as the "Remain" campaign gained support over the weekend before of a controversial referendum later this week. Last week, officials on both sides suspended campaigning for two consecutive days following the tragic murder of Labour Party parliament member Jo Cox. In the U.K., the FTSE 100 surged 3%, while the broader Euro Stoxx 600 Index jumped 3.65%. At one point on Monday, nearly 80% of respondents supported the Stay vote, up from 60% late last week. Simultaneously, top British businessmen, including Virgin Group founder Richard Branson urged voters to avert a Brexit in order to prevent a potential collapse in the Pound. Meanwhile, yields on the Germany 10-Year rose three basis points to 0.05%. For today, Canada is to release data on wholesale sales while later in the week, investors are eyeing a testimony on monetary policy by Fed Chair Janet Yellen, due on Tuesday and Wednesday and the long awaited June 23 referendum that will decide whether the U.K. will remain in the E.U or not.

EUR/USD

The dollar remains at one-week lows against the euro on Monday, as concerns over a potential British exit from the European Union eased, supporting market sentiment. 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. Prior to the long awaited June 23 referendum, investors are also focusing on a monetary policy statement by Fed Chair Janet Yellen, due on Tuesday and Wednesday, less than a week after the central bank kept interest rates unchanged near record lows and lowered its projections for hikes in 2017 and 2018.