Summary Euro and yen both headed higher Monday ahead of the Federal Reserve's policy meeting.
NEW YORK (AFP) - The euro and yen both headed higher Monday ahead of the Federal Reserve s policy meeting, while the pound dropped as fears rise over the looming Brexit vote.
Caution reigned in the markets, pushing the euro to $1.1292, and the yen rose to 106.19 against the dollar at 2100 GMT.
The pound fell to two-month lows against the greenback and the euro before pulling back slightly to $1.4245 and to 79.26 pence per euro.
"These flight-to-quality trades have been underway since last Wednesday, driven by growing fears of Brexit," the British exit from the European Union at stake in a June 23 referendum, said analysts at the Institute of International Finance.
"This suggests that a Leave vote could still have a very large market impact, exacerbating the fall in global equities and major government bond yields," as well as boosting the yen and euro, they said.
Meanwhile the Federal Reserve opens a two-day monetary policy review on Tuesday, with no rate increase expected but eyes on how the Fed characterizes the current tepid picture for US economic growth.
On Thursday the Bank of Japan also concludes a policy review, with some economists predicting more easing measures.
