The Pound Sterling struck a new post-Brexit peak against the US Dollar, extending the recent rally for the Pound. Since the June 2016 Brexit vote, the Pound had experienced a significant decline versus the greenback, but it earlier hit a peak of $1.4119, while against the Euro it struck a 5-week peak. Analysts say that it isn’t a single event which has triggered the Pound’s rally, but the Pound’s resilience and growing confidence by investors that the UK government will be able to secure favorable trade terms.
As reported at 11:10 am (GMT) in London, the GBP/USD was trading at $1.4096, a gain of 0.69%; the pair hit a peak of $1.4119 in the session while the low is at $1.3997. The EUR/GBP is trading at 0.87550 Pence, down 0.35614%; the pair has ranged from a session trough of 0.87480 Pence to a peak of 0.87876 Pence.
Brexit Concerns Waning
As the likelihood of a disorderly Brexit seems to be dissipating, FX traders are looking for any indication that the Bank of England might tighten monetary policy to a greater extent than that already predicted. Traders have already priced in a single rate increase by the BoE but are trying to gauge whether another might be a possibility given the overall improvements in the UK economy. Unemployment data released just a short while ago, and though results were mixed, the takeaway was unexpected growth in average earnings excluding bonuses which hit 2.5%, slightly higher than the 2.4% expected.