Sterling rose more than 1 percent against the euro to a one-month high on Friday, bolstered by a swing of betting odds and polls towards the campaign for Britain to remain in the European Union as US President Barack Obama waded into the debate. Sterling rose by 0.8 percent against the dollar to $1.4453 and 1 percent to a four-week high against the euro of 77.95 pence per euro. The pound was on track for its best week against the single currency since early March.
From 37 percent earlier this week, the chances of Britain voting to leave the EU in the June 23 referendum fell to 32 percent, according to the Betfair betting exchange. Bookmaker Ladbrokes also witnessed a shift in betting towards the "Remain" campaign.
Traders said that while Obama's appeal for Britain to remain in the 28-country bloc had not visibly moved the pound, it had underlined the weight of argument in recent weeks from global and financial leaders in favour of staying. "The polls this week were not good for the "Out" crowd and the dominant consensus, if you talk to people in the market, is just that Britain will stay," said the head of one London-based macro hedge fund, managing around $1 billion in assets. "It's difficult to avoid the impression that sterling has benefited from that this week."
A poor batch of UK retail sales numbers put some pressure on the pound on Thursday, pointing to a weakening of activity as firms and consumers brace themselves for the referendum. But this week's polls have given a solid lead to the "In" campaign, soothing nerves among investors who worry sterling could sink by as much as a fifth in value against the dollar if Britain votes to leave the EU. Sterling has fallen roughly 10 percent since the referendum began to filter into market pricing in November and some major banks earlier warned of a crisis for sterling that would drive it to as low as $1.20 if Britain votes to leave.