- The pound on Tuesday hit its highest level against the dollar since Britain voted to leave the European Union.
- In early trading on Tuesday, the pound reached $US1.4377, surpassing a postreferendum high set in January. It has since pulled back from those highs, after lower-than-expected wage-growth figures.
- Sterling’s value has increased by more than 6% this year, and one currency strategist has called it “the darling of the currency world.”
- You can track the value of the pound with Markets Insider.
LONDON – The British pound on Tuesday climbed to its highest level against the dollar since Britain voted to leave the European Union almost two years ago.
During early trade the pound was up about 0.3% against the dollar to trade at $US1.4377 – just above its postreferendum high set in January.
By 11:10 a.m. BST (6:10 a.m. ET), sterling was marginally lower against the dollar at $US1.4313.
If the pound ends the day higher, it will have made gains against the dollar for seven consecutive trading days.
The pound is also going strongly against the euro, reaching 1.1582 euros, its highest level since May 2017.
The pound’s value plummeted against both the dollar and the euro after Britain voted to leave the EU, experiencing the biggest single-day drop of any major currency in history on the day after the vote. Sterling fell as low as $US1.20 at the beginning of 2017, having traded at close to $US1.50 before the vote.
But the pound has ripped higher since the middle of last year, 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 the 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 past 18 months has also helped the pound over recent months.
“With more than 6% gains since the beginning of the year, the pound is currently the best performing major currency,” Hussein Sayed, the chief market strategist at FXTM, said in an email on Tuesday morning. “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 the 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 if data out this week paints a rosy picture of the UK economy. The latest snapshot of the UK jobs market was released Tuesday, showing UK wage growth outstripping inflation for the first time in more than a year, but slightly below estimates.
Inflation data follows Wednesday, and retail sales figures come Thursday. Solid numbers would most likely push the pound even higher.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.