April 20, 2016 / 4:25 PM / 2 years ago

UPDATE 1-Sterling at 3-week high vs euro as support for "In" camp rises

(Adds details, quotes)

LONDON, April 20 (Reuters) - Sterling hit a three-week high against the euro on Wednesday, after a polls showed support for Britain remaining in the European Union rising before a June referendum.

An Ipsos MORI poll published in the Evening Standard newspaper gave the “In” camp 49 percent, 10 points ahead of “Out” voters. The previous Ipsos MORI survey from March showed “In” ahead by eight points.

Earlier in the day, a TNS opinion poll followed the same pattern.

Sterling rose to 78.675 pence per euro, its highest since March 30 and up 0.2 percent on the day. Against the dollar it was slightly lower at $1.4380 but not far from a three-week high of $1.4420 hit on Tuesday.

“The polls are showing a growing support for the ‘Remain’ campaign. That is bringing down the risk premium for sterling,” said a spot trader.

In the betting market, punters now see only a one-in-three chance of Britain voting to leave the Union on June 23.

Investors have been selling the pound on worries that Brexit would cause huge damage to a country with a trade deficit of 12 billion pounds, its widest in eight years, and a current account deficit that soared to 7 percent of GDP in the final quarter of 2015.

Eikon readers can click cpurl://apps.cp./cms/?pageId=brexit for the latest Brexit news.

Earlier, sterling dipped after data showed the number of unemployed in Britain rose for the first time since mid-2015 in the three months to February while earnings growth slowed, adding to signs that the economy is slowing.

“The data was on the weaker side, but the currency is being driven by Brexit concerns,” said Manuel Oliveri, FX strategist at Credit Agricole. “Any poll that shows some support for the ‘remain’ camp is offering support to the pound.”

Traders said the pound is likely to trade in a $1.40-$1.46 range until the referendum.

On Tuesday, Bank of England Governor Mark Carney told lawmakers that uncertainty around the referendum was weighing on the economy, adding that London could lose its position as the world’s leading financial centre in the event of Brexit. (Reporting by Anirban Nag; Editing by Toby Chopra and John Stonestreet)

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