The pound is at its highest level against the dollar since Britain voted to leave the European Union.
In early trading on Tuesday, the pound is at $1.4372, surpassing a previous post-referendum high set in January.
Sterling’s value has increased by more than 6% since the start of the year, and it is currently “the darling of the currency world.”
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LONDON — The British pound has climbed to its highest level against the dollar since Britain voted to leave the European Union almost two years ago.
The pound is up around 0.25% against the dollar to trade at $1.4372 in early European trading on Tuesday — just above its previous post-referendum high set in January. The pound has now made gains against the dollar for seven consecutive trading days.
The pound is also going strongly against the euro, reaching €1.1582, its highest level since May 2017.
The pound’s value plummeted against both the dollar and euro after Britain voted to leave the European Union, experiencing the biggest single-day drop of any major currency in history on the day after the vote. Sterling fell as low as $1.20 at the beginning of 2017, having traded at close to $1.50 prior to the vote.
However, since the middle of last year, the pound has ripped higher, with the currency trading more than 15% above levels seen this time last year.
Several factors have supported this recent resurgence, ranging from an increased market confidence that the UK and EU can strike a Brexit deal, to falling confidence in the agenda of US President Donald Trump, which has weakened the dollar.Britain’s better than expected economic performance over the last 18 months has also helped the pound over recent months.
Hussein Sayed, the chief market strategist at FXTM, said in an email on Tuesday morning: “With more than 6% gains since the beginning of the year, the pound is currently the best performing major currency. While the dollar weakness partly explains sterling’s strength, higher risk appetite, Brexit negotiations, and surging short-term interest rates were the key attributes to the surging pound.”
Viraj Patel, a currency strategist with Dutch bank ING, labelled sterling the “darling of the currency world,” in an analysis released at the end of last week.
The pound’s value could rise even further this week if data out this week paints a rosy picture of the UK economy. The latest snapshot of the UK jobs market is due on Tuesday, with inflation data following on Wednesday, and retail sales figures on Thursday. Solid numbers would likely push the pound even higher.
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Source:: Business Insider