EU referendum: Sterling hits highest level in 2016 as Britain heads to the polls

The pound reached its highest level this year during Asia trading, as Britons prepared to cast their votes in an historic referendum on the European Union. (EU referendum: follow our live blog)

The British currency gained 0.9% against the US dollar, rising to a year-high of $1.4844 on Thursday morning (23 June) in Asia, before relinquishing some ground and trade at $1.4780 by 8.25am BST. The latest gain means the sterling has now climbed more than 4% against the greenback over the past seven days.

That came as a phone poll conducted by ComRes for ITV and released on Wednesday night put the Remain campaign ahead 54% to 46%, when adjusted for undecided voters, while a separate poll from YouGov put the gap at 51% to 49% in favour of the pro-EU campaign.

However, while the latest poll delivered a timely boost to the pound, economists warned that could exacerbate the slump the currency would suffer in the case of a Leave vote.

"With the pound trading at its highest levels this year, the potential downside here in the case of a surprise vote to leave has got even bigger," said Oanda senior market analyst Craig Erlam.

"Even prior to the rally over the last week, a vote to leave would likely have prompted a sharp decline in the pound. With the pound now around eight cents higher against the dollar than it was then, the potential downside has become even more substantial."

Markets are expected to experience a relatively quiet day, but traders will be closely monitoring the movement in the pound after 10pm, when voting closes. However, given that there will be no exit polls tonight, any significant shift in the UK currency will begin as results trickle out throughout Thursday night and into Friday morning.

On Wednesday, analysts at Citigroup warned that even a Remain vote might not be enough to prevent political instability in the UK, unless the pro-European campaign secures the win with a comfortable margin.

"We see a 60% chance that the majority of British voters will choose Remain in the 23 June EU referendum," Citi analysts said.

"A Close Remain (our base case) could still undermine UK/EU political stability."

Meanwhile, people were seeing queuing up outside currency bureaus in Canary Wharf, Moorgate and Brent Cross shopping centre by IBTimes UK reporters early on Thursday, as Britons dashed for holiday cash.