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Sterling escapes worst-performer tag imposed by Brexit

epa04558290 British Pound notes are piled in London, Britain, 13 January 2015. Official estimates published by the Office for National Statistics (ONS) put the consumer price index (CPI) at 0.5 per cent in December 2014 - its lowest level since May 2000. Inflation was 1 per cent in November 2014.  EPA/ANDY RAIN

 

Bloomberg

The pound has shaken off an unwanted label.
It’s no longer the worst-performing Group-of-10 currency of 2016, after surging this week as polls signaled a receding risk of a Brexit following the European Union referendum in June. Sterling cemented its lead over the Australian and New Zealand dollars on Thursday as retail-sales data showed there’s still life in the U.K. economy.
The pound has been a gauge of sentiment toward EU membership ever since the June 23 referendum was called back in February. With the result too close to call for months, the currency bore the brunt of investor concern each time the government or Bank of England issued warnings that quitting the world’s largest single market would hurt the U.K. economy. With evidence that public opinion is shifting toward the “remain” camp, sterling has risen against all of its major peers this week.
“Some of the gloom has been lifting,” said Jane Foley, senior foreign-exchange strategist at Rabobank International in London.
The pound was supported Thursday as betting company William Hill put the chances of the “remain” camp winning at 82 percent. That followed a series of opinion polls favoring the status quo, including an Evening Standard survey this week that put the pro-Europeans 18 percentage points ahead.
Sterling also got a boost from data showing U.K. sales were more than double the level predicted by economists surveyed by Bloomberg, rebounding after a contraction the month before.
Britain’s currency gained 0.3 percent to 76.59 pence per euro as of 12 p.m. London time, after touching the strongest level since Feb. 4 earlier and climbing 1.8 percent on Wednesday. The pound rose 0.2 percent to $1.4630, putting it almost 2 percent higher this week.

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