Sterling flies as surveys point to UK staying in EU

Sterling is forging ahead against key currencies this afternoon as the market embraces increasing survey evidence that the UK will remain in the EU after its Brexit referendum next month.

At 2.33pm, sterling was up 0.86% against the US dollar, and had slipped 0.4% to USD1271.8 per ounce of gold. Same time, it had advanced 1.26% to €1.2941, and gained 1.2% to 159.750 yen.

Against commodity-backed currencies, sterling had added 1.37% to CA$1.8927, firmed 1.8% to AU$2.0101 and improved 1.72% to NZ$2.1602.

Sterling advanced 2.86% to 23.1237 rand, that latter commodity-backed currency also undermined by media reports South Africa’s Finance Minister, Pravin Gordhan, faces arrest for espionage following a police probe into his alleged part in a special investigations agency within the South African Revenue Service.

Ipsos Mori’s Political Monitor for 18 May said 55% of 1002 people surveyed wanted UK to remain in the EU, against 37% wanting it to leave. Eight percent were either undecided or would not vote.

Betfair said separately that the odds of a British vote to remain part of the EU was up to 76% on Wednesday, from 73% on Monday and around 70% for the two preceding weeks, Reuters reported.

Yesterday, a Bank of America Merrill Lynch said a survey of fund managers showed 71% believed a UK vote in favour of Brexit was either unlikely, or not at all likely.

Last week, Bank of England’s nine-member Monetary Policy Committee said that a leave vote in the 23 June vote to decide the UK's future within the single-currency bloc could cause both economic growth and sterling to fall and unemployment to rise.

The central bank’s governor, Mark Carney, added that Brexit risks included the possibility of a technical recession, defined as two consecutive quarters of negative growth.

Earlier today, UK's jobless rate for March printed at 5.1%, as expected and unchanged from February, Office for National Statistics said.