22/06/2016 World Business Report

from "Islamic State" militants, a US military commander says

the jihadists are still in control of two-thirds of the city.

Those are the latest headlines from BBC World News.

Now for the latest financial news with, with Sally Bundock,

Global markets remain on edge ahead of the UK Referendu.

We get an expert view on the wild swings in currency markets as voters

We have a special report on why your vehicle damages

the environment more when the temperature

In a minute, we'll hear from a farmer in Italy how Brexit

would affect him and his country.

Today is the final day of campaigning ahead of tomorrows

decision on the UK's future in the European Union.

Investors, business leaders, central bankers, and politicians,

worldwide, have been following every twist and turn causing gyrations

The most sensitive has been the currency markets with the pound

soaring to a 5.5-month high on Tuesday against the US dollar.

Also it was a key part of Janet Yellen's testimony before

The head of the US Federal Reserve warning a UK vote to leave

the European Union could have serious consequences

for financial markets and in turn affect economic growth.

With me is Jeremy Stretch, Head of Currency Strategy at CIBC

You have been extremely busy. Indeed. Like many of my guests in

the past week. Let's talk about the pound. Interesting, yesterday it was

soaring, and yet the polls are not in the bag. They aren't saying that

remain has it in the bag but it is expected. Last week the Stirling was

on a bit of pressure. That character rises strong gains, especially on

Monday, with the best movement in eight years. That extended into

yesterday morning. Now we have pulled back a bit. Markets are a bit

more sanguid about the risks. Central banks globally are very much

a tuned to the uncertainties that a Brexit could bring. -- attuned. If

these earnings fell after an exit there would be ramifications for

other currencies, like the dollar. Talk us through that. The Japanese

yen is seemingly going to remain extremely strong. The US dollar as

well. Mentioned by Janet Yellen. It has been strengthening. Yet. She

mentioned it had been strengthening since the 14, appreciating by 20%.

-- 2014. Britain has relied on exports but it has had a dragging

effect with productivity. If we saw them exit, the Stirling will fall

significantly. But currencies and bilateral. Money flow goes on to

other markets if it falls. Including the Japanese yen. It perceived safe

haven. That would cause increasing concern for the Japanese

authorities. Abenomics has relied on a relatively cheap yen. It will be

interesting to see what happens next in terms of what countries do. The

G20 summit earlier this year. There was a discussion about currency

intervention. It was in the thinking of what people said. The Chinese

currency was on the move. Currency wars. In light of this and the

strong yen, will be pounds do anything? We have had currency wars

mentioned periodically over the last six years. People are discussing it.

I think if the Japanese yen is heading back towards 100 against the

US dollar than in every the Japanese yen will feel duty-bound to stop the

move. They have not been active in the foreign exchange market since

2011. If markets are one-sided as Janet Yellen suggested, I think the

Japanese will feel it is inevitable that the need to stem the slide. I

am meant move. Financial markets globally are watching what is a

global issue because of these global ramifications. It will be an

interesting 24 hours. It will be. We will talk to you about it again, I

am sure. OK now. One major sticking point

in the great Brexit They divide the farming community,

not just here in the UK, Italian cattle farmer,

Fabio Baldassarri, says EU policy has pushed milk prices so low

that he will have to sell up He believes a Brexit could spark

similar votes in Italy, where anti-EU sentiment

is currently running high. TRANSLATION: My name is Fabio. I

breed cattle. I think if the UK left the European community, this would

cause a domino effect that would give a future to biodiversity in

agriculture. We are inundated with meat coming from northern and

Eastern Europe with extremely low prices. I am talking about prices

lower than 30 cents delivered in the area of Rome when our price of

production is above 40 cents. Italy and Europe did not protect us in any

way. So, we will have to close our farms. We will be forced to

slaughter our animals because we have become no longer competitive in

a short time. And, of course, there are many

leaders of small and medium size businesses who argue the UK leaving

Europe is the best option. To hear all the views,

go to the BBC Business Webpage. Please take a look when you have a

chance. New research seen by the BBC

suggests pollution from many popular diesel cars is much worse when it's

colder than 18 degrees outside. It means millions of vehicles

could potentially be driving around for most of the year

with their pollution controls Testing company Emissions Analytics

says it's measured a significant rise in poisonous gas emissions

from a wide range of models The SMMT, which represents

the industry, says it's all within the rules and it's

to stop damage to the engine. More from our transport

correspondent, Richard Westcott, It is below 18 degrees for most of

the year in Britain. This new research seen by the BBC suggests

that millions of popular diesel cars could be driving around with

pollution controls partly turned off below that temperature. What is

more, it is perfectly legal. Testing company, Emissions Analytics, said

it looked that the 100 and 13 different models across 31 different

manufacturers. -- 213. On average, about 18 degrees, levels of

poisonous gases were 3.6 times over the European limit. Below that

temperature, pollution increased to 4.6 times over the limit. The

scandal of Volkswagen has ripped the lid off this whole area and people

have been investigating in more details. Us and others are

unearthing lots of other issues. Loopholes in the regulations that

perhaps have been found. They are asked to win down their pollution

controls to help the engine. There is suggestion some are taking

advantage of the rule because turning it off can improve fuel

economy. Can you guarantee they need to do this for engineering reasons?

Absolutely. It is about ensuring the engine maintains optimal condition.

That means you can get what you expect, the car will start, it will

operate smoothly, and there is no long-term damage. Cars have to pass

the slightly older emissions test. There are 5.1 million of them on

Britain's roads. There are now calls for car companies to come clean

about how their pollution systems work.

Embattled German auto giant Volkswagen will face the wrath

of its shareholders at its annual meeting on Wednesday.

Nine months after VW admitted it installed emissions-cheating

software into millions of diesel engines worldwide,

investors want to know why the German giant is nowhere

near drawing a line under this crisis.

Shareholders have been vocal about the way VW management has

Meanwhile, prosecutors are investigating former VW boss

Martin Winterkorn for having allegedly manipulated the market

by holding back information about emissions cheating.

The market. Different moves going on. The pound against the dollar.

And that is the close on Wall Street. Oil above $50 a barrel. See

you later.