Sterling dives on Brexit leave camp leading - BBH

Analysts at Brown Brothers Harriman explained that many market participants began talking as if it were nearly a done deal that the UK will vote to stay in the EU. 

Key Quotes:

"It is as if Winston Churchill's witticism that American can be counted on to do the right thing after they have exhausted the alternatives really applied to the UK. We noted that despite sterling's higher trend, the options market, where contingent risk is best expressed, was still showing high levels of stress and uncertainty. Insurance against Brexit was still be sought, and investors were paying up for it.  

While we are anticipating a near-term pullback in the US dollar after a four-week advance, we expected sterling to underperform.  We warned of a test on $1.45 and recognized the risk of further downside potential.  After initially rising to three-day highs near $1.4725, sterling dramatically reversed course amid a couple of polls that showed those wanting to leave the EU pulling slightly ahead. "