Investing.com - The pound fell to 15-month lows against the euro on Thursday as uncertainty over Britain’s future in the European Union continued to pressure the currency lower.
EUR/GBP touched highs of 0.7946, the most since December 2014 and was last at 0.7927.
Wednesday marked a three-month countdown to the U.K.’s June 23 referendum on its membership in the EU.
The latest ICM poll on the referendum released on Wednesday showed that 43% of U.K. respondents were in favor of a Brexit, compared to 41% who preferred to remain in the EU and 16% who were undecided.
Meanwhile, bookmaker Paddy Power narrowed the odds on a Brexit to 36% in the wake of the attacks in Belgium, compared to odds of 33% on Monday, while political prediction website PredictIt placed the probability of leaving at 45%.
As investors sought protection against another leg down in the British currency, three-month sterling/dollar implied volatility hit 15% for the first time in nearly six years, while euro/sterling implied volatility hit a seven-year high of 13.8%.
Sterling found some support after official data showed a smaller-than-expected decline in U.K. retail sales in February.
The Office for National Statistics said retail sales fell 0.4% last month, compared to forecasts for a decline of 0.7%. Retail sales in January rose by 2.3%.
Consumer purchases were up 3.8% from the same month a year earlier, matching expectations, after rising at an annual rate of 5.4% a month earlier.
Core retail sales, which exclude automobile sales, dipped 0.2% last month, better than forecasts for a decline of 1.0% and following a jump of 2.3% in January.
Clothing and shoes fell 0.4%, with poor weather delaying purchases of spring and summer attire, the ONS said.
GBP/USD was at 1.4092 following the report, from around 1.4085 earlier.
Demand for the dollar continued to be underpinned as hawkish comments by Federal Reserve officials raised the prospects that the central bank could act soon to raise interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.2% at one-week highs of 95.25.