Aussie dollar surges on "Bremain" confidence

The Australian dollar has surged on confidence that Britain will remain in the European Union, hitting a new two-month high.

At the Asian open on Friday, the Australian dollar was trading at 76.35 U.S. cents, up from 75.26 U.S. cents at Thursday's close.

The positive sentiment towards the "remain" camp winning the overnight referendum helped commodity prices, thus the Aussie dollar.

"Markets appear to be anticipating a victory for the remain vote," Commonwealth Bank of Australia currency strategist and international economist Joseph Capurso said, adding any reaction to the decision will be asymmetric, with a "leave" victory more pronounced than remain.

"If the outcome is for Britain to leave the EU, global equity and commodity prices will fall, and the Australian dollar should decline by 2-3 percent, (but) if the outcome is or Britain to remain, global equity and commodity prices will lift, and the Aussie could rally by 1-2 percent," Capurso said.

That said traders are setting shorts in case of a temporary pull-back as opportunists take profits.

Markets could also quickly reverse is news begins to leak that a "leave" vote is closer than thought, given polls show a clearly divided British population.

With the currency market likely to be very thin, moves will be exacerbated, Capurso said.

By 0954 local time, the Australian dollar had softened to 75.30 U.S. cents. Endit