Yield on the 10 year German Bund turned negative for the first time ever on Tuesday. The persistent downward pressure on yields and flattening of the yield curve across Europe has reignited concerns about the fiscal health of banks across Europe.
The British pound remained fragile to increasing speculation that Britain may vote to leave the European Union. Sterling traded near a two-month low against the dollar on Tuesday and the yen hovered near six-week highs against the greenback as the Brexit referendum is less than 10 days away.
Two recent opinion polls show a lead for the "Leave" campaign. While many market participants are skeptical about the polling, recent poll results do seem to suggest a increasing momentum for "Leave" campaign.
GBP/USD fell to 1.4121, just shy of a two-month low of 1.4117 that was set on Monday. GBP/JPY fell to 149.17 as the Japanese currency gets continued support from the increasing uncertainty.
EUR/USD edged back towards Monday's low and now trades at 1.1240.
