The pound is making headway against both the dollar and euro on Tuesday after two weeks of pain.
Here is how sterling looks against the dollar at just after 7.10 a.m. BST (2.10 a.m. ET):
And here is how the pound looks against the euro at the same time:
The rally for sterling appears to be more about dollar weakness than any particular positive news for the UK economy. Kathleen Brooks, research director at City Index, says in an emailed statement this morning: “The start of the week was marked by a weaker dollar and a decline in Treasury yields. Even the battered pound has managed to shrug off political risks and break above 1.22.
“The key driver of the dollar rally in recent weeks has been the rise in Treasury yields. On Monday the bond market sell off paused, and 10-year bond yields fell by 5 basis points yesterday afternoon. This may not sound like much, but for the typically slow-moving bond market it is a decline worth watching.”
Sterling is still down around 15% against the dollar since the June 23 referendum result and still down close to 5% against the greenback over the last 2 weeks. But it’s a start.