Shares rise as Fed expectations soothe Brexit fears

by Jonathan Adams

European shares rose and sterling gained against the dollar and yen on Wednesday as expectations the U.S. Federal Reserve will not raise interest rates any time soon soothed investors on edge over whether Britain will vote to leave the European Union.

U.S. shares, which have not been immune to Brexit fears, are likely to open higher, according to index futures ESc1 1YMc2.

Worries that Britain, the world’s fifth-largest economy, could quit the EU after June’s 23 referendum have dominated markets this week and driven investors towards safe-haven assets such as gold and the Swiss franc.

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

“It’s a minor turnaround to the negative sentiment of the last few days, but there is a bit more risk appetite across the board, with the Fed’s likely position lending a bit of support,” said Hantec Markets’ analyst Richard Perry.

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