Sterling has received some support from the latest political comments by both the US and UK leaders supporting Britain’s membership of the European Union.
London - The British pound kept its momentum against the US dollar on Monday after gains late last week driven by the US President Barack Obama's crystal clear support for the UK's membership of the European Union (EU).
So far it appears that politics and the anti-Brexit rhetoric on both sides of the Atlantic continue to influence the British currency's curve more than UK macro fundamentals, given sterling's notable resilience to weak retail sales figures last week, and expectations of a slower GDP growth in the first quarter of this year.
Betting company Ladbrokes (LON:LAD) said last week on Friday that the odds for the 'Remain' had surged after the Obama comments on Britain's need to remain inside the EU, and that the possibility of Brexit had "diminished sharply."
According to Ladbrokes latest figures, the support for Brexit plunged to 29% on Friday afternoon, down from 34% measured at the start of the last week. The odds for the 'Remain' camp surged to 77%.
"President Obama has raised the hackles of the UK’s pro-Brexit campaign by warning that it could take up to a decade to negotiate a trade deal with the US," Rabobank analysts wrote in a note on Monday.
The support for the 'Remain' camp has been strengthening recently after nearly all the domestic and global credible forecasting and economic organizations warned that Brexit could make the British people poorer, and could have detrimental near and longer-term economic consequences.
Bank of England (BoE) Governor Mark Carney warned last week that "a vote to leave the EU might result in an extended period of uncertainty about the economic outlook, including about the prospects for export growth...” and could also "have significant implications for asset prices". Carney also said that Brexit could lead to higher inflation and slower economic growth.
Of the 13 opinion polls published so far in April eight have shown support for the 'Remain' camp, while just three polls showed the public leaning towards Brexit, with the other two polls evenly split.