Friday 17 August 2018

Sterling climbs above $1.40 to hit post-Brexit-vote high

Sterling has climbed 4pc since the start of the year against the dollar, putting it on track for its strongest month in more than four years against a dollar that has weakened across the board. Photo: Stock image
Sterling has climbed 4pc since the start of the year against the dollar, putting it on track for its strongest month in more than four years against a dollar that has weakened across the board. Photo: Stock image

Jemima Kelly

Sterling powered past $1.40 to reach its highest level since the vote to leave the EU in June 2016, extending a rally on the back of growing optimism around Britain's chances of securing a favourable Brexit deal.

Sterling has climbed 4pc since the start of the year against the dollar, putting it on track for its strongest month in more than four years against a dollar that has weakened across the board.

On a trade-weighted basis, too, the pound has made significant gains, with the Bank of England's sterling index hitting an eight-month high on Monday.

Analysts said although there had been little in the way of solid developments around Britain's exit from the EU since the start of the year, the noises coming from Europe had appeared to be largely positive, and sterling was more sensitive to good news than bad.

French President Emmanuel Macron said on Saturday Britain would be able to have a bespoke deal with the trading bloc - one of Prime Minister Theresa May's objectives - though London's financial centre could not enjoy the same level of access to the EU under May's current Brexit plan. "Even small steps are currently quite powerful (for the pound), but for it really to kick on from here you're going to need to see more meaningful progress," said ING currency strategist Viraj Patel. (Reuters)

Reuters

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