UK Sterling increased this week following President Obama’s comments about whether the UK should remain in the European Union. The Pound has been under significant downward pressure recently, largely owing to the uncertainty of Britain’s future position in the European Union, ahead of June’s referendum. His pro-European position, backing UK Prime Minister Cameron’s ‘Stay’ canvassing has helped Sterling recover somewhat from a poor first quarter against the US Dollar.
Markets, of course, do not like uncertainty and although this turn of events does not necessarily create certainty that the UK will remain part of the European Union, many analysts see Obama’s comments as a positive indicator that a UK exit will not happen. Indeed, President Obama is well-liked and respected in the UK, and David Cameron will be hoping that his influence with British voters will swing the vote to stay part of the EU.
Coupled with some uninspiring results from the United States across housing and consumer goods, the Dollar is under pressure from Sterling to respond in a positive way. With less than 60 days to go until the referendum in Britain, there will undoubtedly be some further shifting in the GBP/USD exchange.