Pound’s advance shows Bremain’s dominance

Bloomberg

The pound rose for a fourth day versus the dollar as data showed that U.K. economic growth slowed in the first quarter, further evidence that the currency’s direction is being driven by investors’ view on the nation’s June referendum on its membership of the European Union.
Sterling touched the highest level versus the U.S. currency since February on Tuesday amid signs the “remain” camp was pulling ahead in the campaign over Britain’s membership of the EU. While the referendum is still about two months away, it has dominated the pound’s direction since the start of the year, acting as barometer of sentiment throughout the debate. The U.K. currency moved in its tightest trading range in a month against the dollar on Wednesday.
“U.K. growth conditions have not been the key driver of the currency this year,” said Manuel Oliveri, a foreign-exchange strategist at Credit Agricole SA’s corporate and investment-banking unit in London. “Everything has been about Brexit fears.”
The pound rose 0.2 percent to $1.4605, having gained 1.8 percent in the previous three days. It climbed to $1.4639 Tuesday, the highest since Feb. 4. Sterling was little changed at 77.47 pence per euro. Growth slowed to 0.4 percent from 0.6 percent in the final three months of 2015, as forecast in a Bloomberg survey of economists. The estimate, published by the Office for National Statistics on Wednesday, matched the weakest pace since the end of 2012.