Obama effect holding steady as sterling soars against the dollar

 
Jake Cordell
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The pound has arrested its decline against the euro and the dollar to put on five per cent in recent weeks
The pound has arrested its decline against the euro and the dollar to put on five per cent in recent weeks (Source: Getty)

The pound has soared against the dollar today, smashing through the $1.46 mark and extending a run of gains that has caused sterling to rise by six per cent in the past 10 weeks.

This afternoon, the pound was trading at $1.4614, up 0.91 per cent on the day.

Sterling's gains were mirrored against the euro, where it was also up 0.6 per cent to €1.2927. At the start of April, the pound slipped to just €1.2354 - its lowest rate against the single currency since May 2014.

Volatility has been pinned on the uncertainty in the run up to the EU referendum. The Bank of England has issued a number of notable warnings about how instability could have knocked 10 per cent off the value of the pound between November and early April.

Those losses appear now to have been reversed, with Barack Obama's warning on Brexit interpreted as a boost for the remain camp - a sentiment which is now feeding through to the currency markets.

The $1.45 level was seen to be a key ceiling for the pound, with analysts expecting sterling to remain rooted below that level until after the vote.

"The pound has maintained its momentum from last week on the back of a reduction in Brexit concerns and support for the Remain campaign, including from recent comments from President Obama," said Alexandra Russell-Oliver, analyst at currency traders, Caxton FX.

"With so many voters as yet to decide which way to vote, volatility will ... likely keep the pound under some pressure against major currencies," Martin Arnold, macro strategist at ETF securities said.

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