European Sentiment Towards Sterling Increasingly Positive

New research compiled by social trading platform, eToro, reveals European investors are more positive on the outlook for sterling ahead of the Prime Minister triggering Article 50 tomorrow than they were ahead of the EU Referendum vote last June.

eToro has been tracking the trading sentiment of investors based in the UK, Germany, Italy, Spain and France since June last year to see how their sentiment towards the Pound Sterling has changed.

On average, 71% of sterling traders in these countries are now buying the currency, compared with 47% at the time of the Brexit vote.

In the UK specifically, 66% of traders are buying sterling this month, compared with 48% of traders in June.

Surprisingly, across the nine months since the EU Referendum, Spanish investors have been the most confident in the pound, with French investors the least confident.

France is the only country where traders have been selling sterling more than buying, since the Brexit vote.

UK investors have been the second most confident across the nine months. But as the triggering of Article 50 has loomed in March, sentiment has started to weaken. Traders in Germany, Spain, and Italy now all have a more positive outlook for the Pound than the UK.

Mati Greenspan, senior market analyst at eToro commented: “European sentiment towards sterling gives us an insight into Europeans’ view of Brexit more broadly. As the triggering of Article 50 approaches, sentiment towards sterling is more positive than at the time of the EU Referendum vote across Europe.

“Investors in France take the least rosy view for the UK’s prospects outside of the EU. Perhaps they are mindful of the risks their own election poses to French membership of the EU. Spanish investors however are more positive than the British on the pound, something that might raise eyebrows in Madrid’s corridors of power.

“Yet this is unlikely to persist. Article 50 itself may not be significantly market moving, but as Brexit negotiations get underway we expect sentiment towards sterling to change. In particular in France and Germany, the forthcoming elections may be proving a distraction and blurring the picture. Dependent on the outcomes, once these are out of the way and minds turn to the Brexit negotiations, we expect traders in these regions to pay closer attention to news coming out of EU discussions, and for volatility around sterling to increase.”

Positive sentiment towards GBP