Barack Obama’s visit to the UK may have annoyed Leave campaigners, but it did wonders for the pound which has hit a 10-week high on back of the President’s plea for Britain to stay in the European Union.
The pound was trading at $1.4495 on Monday morning, up 0.64 per cent on the day and one per cent higher than when Obama touched down in the UK last Thursday evening.
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“Sterling surged with ferocity last week as a sharply declining Brexit campaign coupled with comments from Obama against a UK exit bolstered optimism that voters could be swayed against voting for an exit from the EU,” said Lukman Otunuga, research analyst at currency traders FXTM.
The pound has proved highly susceptible to the swings in the referendum campaign. The Bank of England along with a number of investment banks have all warned that a vote to leave the EU on 23 June would cause severe volatility.
In late February, the pound reached a low of $1.38, but has since climbed to today’s value of $1.44. Traders believe that the $1.40 - $1.45 range for the currency is fairly sticky for now, with the pound set to bounce around within those prices for the foreseeable future.
In this climate, analyst Otunuga warned that the gains could be short-lived: “This move felt quite inflated and bears could return when normality kicks in. Uncertainty over a Brexit remains rife and this continues to haunt investor attraction towards the pound.”