Investing.com - The pound strengthened against the dollar and the euro on Tuesday after a new opinion poll showed the ‘Remain’ campaign with a big lead with one month to go until the referendum on Britain’s European Union membership.
GBP/USD was up 0.79% at 1.4599, rebounding from Monday’s lows of 1.4441.
The latest ORB poll, published in Tuesday's Telegraph newspaper, showed that the “Remain’ campaign has a 13-point lead over the ‘Leave’ campaign.
Support for remaining in the EU stood at 55%, while support for Brexit was at 42%.
On Monday, British Prime Minister David Cameron said exiting the EU would be economic self-destruction, as he presented a finance ministry report warning of recession, a sharp fall in the pound and half a million job losses.
Meanwhile, data on Tuesday showed that Britain's government borrowed more than expected in April and the budget deficit for the previous financial year was revised up.
The Office for National Statistics said public sector net borrowing came in at £7.2 billion in April, down 4.4% from a year earlier.
Economists had forecast a shortfall of £6.6 billion.
The shortfall in the budget for last year was revised up to £76 billion, almost £2 billion more than previously estimated, the ONS said.
Sterling was sharply higher against the euro, with EUR/GBP dropping 1.02% to 0.7668.
The euro extended early losses after a report showing that German economic sentiment deteriorated unexpectedly in May, amid ongoing concerns over the outlook for the global economy.
The closely watched ZEW index of German economic sentiment fell to 6.4 from April’s reading of 11.2.
Economists had expected the index to tick up to 12.0.
Another report showed that Germany’s economy grew 0.7% in the first quarter, boosted by strong private consumption and increased construction investment.
Demand for the dollar continued to be underpinned after comments by Federal Reserve officials signaled that interest rates could rise in the coming months.
St. Louis Fed President James Bullard said Monday that more factors favored a gradual rate increase versus keeping them steady.
Separately, San Francisco Fed President John Williams said he still sees the central bank raising interest rates two to three times this year.
The remarks came after last week’s minutes of the Fed’s April meeting revived expectations for a rate hike as soon as next month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.17% at 95.39.