The pound is tumbling

The pound is sliding on Monday morning, falling off recent highs, thanks to a strengthening dollar on the day.

Sterling charged higher on Friday, reaching its highest level since the “flash crash” that caused a massive drop in the currency’s value in early October, but it has now all but erased those gains after US bond yields surged in overnight trade, pushing the dollar upwards.

Around 8.10 a.m. GMT (3.10 a.m. ET) sterling is lower by roughly 0.6% against the greenback, closing in on the psychologically significant $1.25 mark on the day. Here is the chart of how that looks:

US bond yields soared in Asian trade, which in turn, lit a fire under the US dollar which is rallying hard across the board.

Donald Trump’s pro-growth stimulus plans, even before specific detail is known, are creating a massive re-think across financial markets.

The move in US yields has seen the dollar rip higher in response with the US dollar index up more than 0.7%, something that in turn is driving sterling lower.

The pound had 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 an initial slide in the dollar after the shock election of Trump, which has now reversed.

By contrast, the pound has actually gained a little on the euro on Monday, up roughly 0.2% on the single currency. Here is the chart:

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