Contrary to some headlines on concerns about the currency, investor sentiment about sterling is more upbeat than just before last June's Brexit vote, data from an online platform shows.

A “social trading platform” called eToro says that European investors have become more positive on the outlook for sterling since the Brexit vote last June, suggesting some predictions around the currency’s demise might be unwarranted.

Since the 23 June referendum on the European Union last year, which saw a majority of voters choose to hit the Brexit button, sterling has fallen around 16 per cent against the dollar and also declined around 10 per cent against the euro. 

Ahead of the UK government’s expected move to trigger the formal exit process under Article 50, eToro, the platform, said research among European investors shows they are more positive about sterling than they were before 23 June last year. (eToro is a social trading network with more than 6 million users worldwide across 140 countries. It allows users to trade online, communicating with other traders and copying other traders if desired. The platform is based in the UK and Cyprus.)

The platform tracked the trading sentiment of investors based in the UK, Germany, Italy, Spain and France since June last year to see how their sentiment towards sterling has changed. On average, 71 per cent of sterling traders in these countries are now buying the currency, compared with 47 per cent at the time of the Brexit vote. In the UK, 66 per cent of traders are buying sterling this month, compared with 48 per cent of traders in June.

Across the nine months since the EU Referendum, Spanish investors have been the most confident in the pound, with French investors the least confident, the platform’s data showed. France is the only country where traders have been selling sterling more than buying since the Brexit vote.

“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,” said Mati Greenspan, senior market analyst at eToro.

“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,” he said. 

“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,” he added.