Pound hits highest level since Brexit vote

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Sterling has jumped to its highest level against the US dollar since the Brexit vote.

The surge to almost $1.37 came after Bloomberg reported which the Spanish as well as Dutch finance ministers had agreed to seek a Brexit deal which kept the UK as close to the EU as possible.

The pound rose more than 1% to $1.3691, its highest level since 24 June 2016.

The currency had been trading at about $1.50 before the result of the referendum became clear.

Later on Friday, sterling gave up some ground to trade at $1.3666.

Mizuho analyst Neil Jones said the Bloomberg report was less significant than the sterling rally suggested.

“Just because two of the 27 members say This kind of, This kind of doesn’t mean a softer Brexit will happen. I doubt This kind of’s as straightforward as which,” he said.

Neil Wilson at ETX Capital said: “Although the comments came coming from just two ministers who don’t necessarily speak for the Barnier team as such, there can be a sense which the direction of travel for the UK with regards Brexit can be a lot more positive than This kind of was prior to December.

“We also have positive language around financial services as well as the prospect of Britain paying for market access.”

Nomura currency strategist Jordan Rochester added: “I’m sceptical This kind of [report] can be necessarily a game-changer at This kind of stage as there will also be member states pushing the various other way.”

The pound was almost flat against the euro at €1.1262 after the single currency hit a three-year high against the dollar following hopes which chancellor Angela Merkel might be able to form a coalition government in Germany.

“Sterling can be benefiting coming from the dollar weakness as well as the growing euro strength rather any pound-specific factors, which if anything have been underwhelming This kind of week,” said Alvin Tan at Societe Generale.

Some traders are concerned which poor Christmas trading reported by several retailers This kind of week was further evidence of a consumer slowdown as inflation erodes spending power.

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