Aussie dollar soars as Britain eyed

The Aussie has jumped sharply as investors take a shine to greater risk.

The Australian dollar climbed to its highest level since early May on Thursday ahead of the UK’s referendum on membership in the European Union.

At 5.30pm (AEST), the Australian dollar was trading at US75.37, its highest since May 3, compared with US74.99 late on Wednesday. The UK pound and euro also gained in Asia.

While polls ahead of the so-called “Brexit” vote have been balanced in recent days, markets are betting on the UK staying with the trading bloc. Bookmakers have just 25 per cent odds that the UK will vote to leave.

A leave vote would certainly “throw the cat bodily among the pigeons,” ANZ said in a research note.

Marshall Gittler, head of investment research at FXPrimus, said a vote to leave would create chaos.

“In the first case, the pound would plunge. The euro would also come under pressure ... Funds would flow out of these currencies and into the dollar,” he said.

Otherwise, trading in the Aussie was restrained in the absence of any meaningful economic data.

Dow Jones newswires