The pound is charging on Friday, reaching its highest level since the “flash crash” that caused a massive drop in the currency’s value in early October.
Sterling is up 0.7% on the dollar to trade at $1.2637 at around 9.45 a.m. GMT (4.45 a.m. ET), the first time it has passed the $1.26 mark since October 6, the day before the “flash crash.”
Here’s how the currency looks against the greenback so far on Friday:
The pound has been steadily climbing in the past week or so, buoyed by the High Court’s ruling that parliament must be given a vote on the triggering of Article 50, as well as a slide in the dollar after the shock election of Donald Trump as US president.
Caxton FX analyst Alexandra Russell-Oliver says in an email this morning: “The pound may be receiving additional support as President-elect Trump emphasises that the US and the UK will continue to enjoy a “very special” relationship.”
Sterling has now gained more than 4% on the dollar since October’s flash crash. That crash was thought to be triggered by a Financial Times article saying French President Francois Hollande wanted to be hard on the UK in negotiations for Britain’s exit from the European Union. That pushed the pound lower, triggering some algorithms to automatically sell. Thin trading volumes meant the impact of this was outsize and created a downward spiral as the slump triggered more algorithms to sell.
However, the pound is still almost 15% below its pre-referendum high against the dollar.
Britain’s currency is also gaining on the euro on Friday, up as much as 0.8% against the single currency: