LONDON: Sterling fell to a two-week low against the dollar on Monday, hurt in part by an opinion poll showing the race between those wanting to stay in the European Union and those wanting to leave is still on a knife edge.
A YouGov opinion poll for ITV television showed the "In" campaign leading by 42 percent to 40 percent for the "Out" camp.
Traders also pointed to a Sunday Times report that Bank of England chief Mark Carney was preparing to cut interest rates, in the event Britain chooses to leave in the vote on June 23.
The BOE's monetary policy committee meets this Thursday and the Bank, which has warned about the economic risks of a Brexit, will release updated growth and inflation forecasts in a quarterly report.
Sterling fell to $1.4375, down 0.4 percent on the day and well below a four-month high of $1.4770 struck last Tuesday. The euro was up 0.1 percent at 79.165 pence "Last week, 10-year gilt yields declined by 20 basis points, pushing nominal yield differentials against sterling," said Hans Redeker, chief currency strategist at Morgan Stanley.
"This week's focus will be on Thursday's release of the quarterly Inflation Report. The UK has entered a cyclical slowdown, suggesting rate expectations to fall further," he said, recommending investors to sell the pound against the dollar and the Swedish crown.
Sterling fell last week, retreating from four-month highs, after poor surveys of manufacturing, construction and services highlighted the economic risks posed by the referendum.
"This week's "Super Thursday" isn't expected to yield any bullish bearing," said Tobias Davis, head of corporate treasury sales at Western Union.
"Super Thursday" is when the BOE announces its rate decision, releases its quarterly Inflation Report and Carney addresses a news conference. Most economists reckon leaving the EU would deal a blow to the British economy, with a hefty current account deficit - 7 percent of GDP in the last quarter of last year - leaving it vulnerable to any pull-back in investment flows.
The Sunday Times report said the Inflation Report this week is likely to deliver its most detailed warning on the potential impact of Brexit on the economy, which is sharply slowing ahead of the June vote.
On Monday, Prime Minister David Cameron upped the rhetoric, saying that staying in the European Union helped protect the country and boosted its power on the world stage.
He also challenged "Out" campaigners to show how Britain would be safer and better off if the country left the EU.
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