Pound Rises as Fed Expectations Calm Brexit fears

European stocks rose on Wednesday after data reveal expectations of dovish words from the US calmed investors on whether Britain will vote to leave the European Union.

The pound gained against the yen and dollar as investors rescind their demands for safe-haven assets ahead of Fed’s meeting.

Recently opinion polls have put the “Leave” campaign ahead, though bookmakers’ odds still favour a vote to remain.

But with the Fed seen certain to leave interest rates unchanged later in the day and markets giving no more than a 15 percent chance of a hike this year, investors on Wednesday showed a greater appetite for risk, with the yen and the Swiss franc taking a back seat.

“Janet Yellen has been the fairy godmother of the bull market on a number of occasions,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private-banking unit in Hellerup, Denmark. “I’m looking for her to repeat that performance.” Still, fears about Brexit “have finally spread beyond currencies and put a lot of pressure on all asset classes lately,” he said.

The pound strengthened 0.3 percent to $1.4176, having hit a two-month low of $1.4091 on Tuesday. The sterling also rose half a percent to 150.53 yen.

The dollar climbed 0.2 percent to 106.33 against the yen, having fallen as far as 105.63 yen on Tuesday. The euro was flat at $1.1215 but jumped 0.3 percent against the Swiss franc to 1.0829 francs.