The pound’s looking sound as it gains even more ground
There's no doubt about it – the pound is tearing it up this week.
Sterling smashed through another barrier this afternoon to stand at $1.4708, up another 0.5 per cent against the US dollar on the day and approaching one of its highest levels for the year.
Read more: Sterling volatility just hit a seven-year high
Against the euro, the quid was also storming ahead, comfortably above the €1.30 benchmark, swapping hands at €1.3184 – its highest since February.
The "effective exchange rate", which measures the pound against a basket of currencies has climbed 4.4 per cent since the beginning of April.
So much for that Brexit uncertainty.
But before we dismiss the effect of the referendum too quickly, good news from the opinion polls could be driving the recent bounce. Just like when Obama came to town and talked down the idea of a trade deal, currency traders like the tune of big hitters swinging behind Remain.
"The pound rallied as markets continued to price in increased expectations that the UK might remain in the EU," said Alexandra Russell-Oliver, foreign exchange analyst at Caxton FX.
Read more: Is a weaker pound such a bad thing?
Yesterday saw plenty of referendum action to put some sails behind sterling. A poll for ORB gave the Remain side a 13-point lead while the Bank of England governor, Mark Carney, went big on his Brexit warnings in front of the Treasury Select Committee, taking down Tory MPs who dared to question his authority.
Ana Thaker, economist at Phillip Capital UK, suggested that the currency markets were "becoming increasingly sensitive to data and comments of the Brexit debate". In that context, "we can expect to see more volatility in sterling" over the next few months.
That might not all be one-way, other analysts suggested.
"Although bulls may be commended on their ability to exploit this opportunity to send sterling higher across the board, the currency may be poised to decline as uncertainty continues to mount ahead of the vote day," Lukman Otunga of FXTM, cautioned.