Sterling approached its biggest one-day rally since 2009 in midday trading, up 1.24 per cent at $1.46 to the pound.
The FTSE 100 also made gains, jumping 200 points ahead at 6223, meaning that about £50 billion has been added to the value of the index, making up for some of the losses seen since the end of May.
"The pound has moved from buying one dollar forty cents on the lows of Thursday to buying $1.46 now," said Louise Cooper, a City analyst.
"As one FX strategist said to me this morning: `I’d normally expect to see that size of move in a month`."
Polls have shifted over the weekend, with the Remain campaign edging ahead just days before Britons vote.
A Sunday Times and YouGov poll put Remain on 44 per cent, just ahead of Leave, on 43 per cent. A Mail on Sunday poll& had Remain ahead by 45 per cent to 42 per cent.
A national poll by BMG for the Herald put Remain even further ahead, on 53.3 per cent to Leave`s 46.7 per cent.
Meanwhile the FT`s poll of pollsput both campaigns neck and neck at 44 per cent.
RBC Capital Markets said gains made by the pound were a reflection of investors taking comfort that the UK was more likely to vote to stay.
"A higher chance of the UK voting to stay is a relief for markets (equities and the pound sterling) that had been preparing themselves for a Leave vote and the uncertainty it could inflict from both a financial, economic and political standpoint," said Mike van Dulken, analyst at Accendo Markets.
Banks and builders led the way in the FTSE 100, with RBS shares up 7.38 per cent at 238.50 points and Lloyds up 6.63 per cent at 69.44.
Meanwhile Taylor Wimpey was up 7 per cent at 188.43.
But Mrs Cooper, City analyst, cautioned against solely crediting the EU referendum for gains in markets.
"This move is driven by computer trading, with computer algorhythms driving the move higher. As various technical levels are breached, more buy orders come in and momentum gathers. The `real players` in the market – corporates and pension funds – are mostly on the side lines," she said.
Pound surges against the dollar, global stocks rise as Brexit fears subside
21 June 2016
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The pound has surged against the dollar after opinion polls showed that support for the UK staying in the EU was gaining ground ahead of the referendum.
