The question now is whether the results should be seen as an outlier following a raft of polls showing the ‘Remain’ camp in the lead, or whether it marks the start of a broader shift toward the ‘Leave’ campaign. Whatever the outcome, the drop in the pound shows just how sensitive investors are to shifts in public opinion, highlighting the risk of more volatility with just over three weeks of the campaign left to go.

“The market has moved to reprice in higher risk of Brexit,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “But so far it is only one poll’s result. If repeated in other polls it would result in a more significant decline for the pound.”

The pound dropped 0.9 percent to $1.4511 as of 5:37 p.m. London time, the biggest drop since May 3. It weakened 0.9 percent to 76.79 pence per euro. A gauge of the pound’s one-month volatility versus the dollar climbed to 19.25 percent, the highest since 2009.

Eoin Treacy's view

The likelihood of whether the UK stays or leaves the EU rests not so much on the rationale behind it but on the ability of the exit camp to make their case for why the UK would be clearly better off outside the union. It’s going to be an interesting few weeks with the vote to take place on June 23rd. 

In the meantime the Pound has encountered resistance in the region of $1.47 on two occasions now; posting two downward dynamics from that area. It is unlikely to be able to sustain a rally beyond that level unless a positive outcome for the no campaign is announced. We can expect heightened volatility between now and then in the currency markets and also in the stock markets because the impact of an exit vote would have far ranging repercussions.  

The FTSE-350 has also paused in the region of the upper side of its short-term range and will need to sustain a move above 3600 to signal a return to demand dominance beyond the short term.