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Pound Sterling (GBP) Charges Ahead on 'Brexit' Attitude Shift

April 25, 2016 - Written by Frank Davies

The Pound has rushed ahead against peers today, thanks to the odds of a 'Brexit' dropping considerably.

Easing 'Brexit' Concerns Support GBP Exchange Rate Gains



The Pound Sterling (currency : GBP) was hammered in the aftermath of Mayor of London Boris Johnson’s announcement that he would be supporting the ‘Leave’ campaign shortly after the date of the forthcoming UK European Union In / Out referendum was announced. The implication was that investors believed that the backing of a political ‘Big Beast’ made a vote for Brexit more likely.

However, evidence is increasing that the ‘Boris Effect’ is now wearing off.

The latest Poll of Polls, published during the middle part of last week, suggests that there is now clear blue water between the ‘Remain’ campaign and the ‘Leave’ campaign.

The survey, which aggregated individual polls carried out by ICM, ORB, Ipsos MORI, ComRes, YouGov and TNS between 12/04/2016 and 19/04/2016, put ‘Remain’ ahead by a convincing 54% to 46%. As recently as 14th April the same poll of polls was suggesting the race was still too close to call, coming in at 51% to 49%.

Comments from US President Barack Obama Aid GBP Exchange Rate Appreciation



Many analysts suggest that comments from Boris Johnson at the end of last week mean that the next polls which are published may point to an increased lead for ‘Remain’.

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Johnson was widely accused of ‘playing the race card’ following an article published in the British popular press ahead of the weekend in which he discussed US President Barack Obama’s reported removal of a bust of Wartime Leader Winston Churchill from the White House.

Johnson wrote that, ‘some said it was a symbol of the part-Kenyan president's ancestral dislike of the British Empire - of which Churchill had been such a fervent defender.’ The use of the phrase part-Kenyan was taken by many as a form of racial stereotyping, while others noted that his phrasing played into the hands of ‘Remain’ campaigners by confirming the suspicions of a proportion of voters who consider supporters of Brexit to be blanket ‘ant-foreigner’.

Even those ostensibly on Boris’s side found it difficult to defend him. Rabid anti-EU campaigner Nigel Farage noted that, ‘I'm not saying Boris was wrong, but I think if you are seen to be attacking the man, not the ball, that's not what you need to be.’ If polls this week hint that ‘Remain’s’ lead is increasing, then many analysts expect the Pound Sterling to outperform the other sixteen most actively traded global currencies as the weekend approaches.

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