Sterling hits $1.40 in post-Brexit vote high

Getty Images

The pound extended its rally against the dollar to rise above $1.40 for the first time since the Brexit vote.

Analysts said the pound’s recovery has been helped by the decline of the dollar and a reassessment by some investors of the UNITED kingdom’s economic prospects.

Others have said that, in spite of the little development in Brexit talks this month, there was a degree of optimism about the UK’s ability to get a bargain.

The pound rose 0.3% to $1.4030 on Tuesday afternoon, before easing back.

Sterling fell below $1.20 to 30 years against the dollar in the months after the UK has voted to leave the European Union, contributing to an increase in inflation as imports became more expensive.

But the pound has seen a steady recovery in recent months, that the benefits of the UNITED kingdom tourists to visit the UNITED states and could bring down the cost of imports.

Analysts have highlighted a number of factors for the pound has risen against the dollar, which has also seen briefly at $1.40 on Monday night.

“There is definitely a feeling that Brexit is now far more likely to be “soft”, which underestimates the risk of further problems to face in our point of view, but for the moment it is brought at the request of [pound],” said John Marley, head of FX strategy currency consultants Infinity International.

The French President, Emmanuel Macron told the BBC over the weekend that the UK could have a trade agreement with the EU.

At the beginning of this month, the pound rose after a news report that the Spanish and Dutch finance ministers have agreed to ask for a Brexit deal that has kept the UNITED kingdom is close to the EU as possible.
UK growth upgrade may ‘nana’ Brexit hit
Because there are Brexit talk about?

But others said the recovery in sterling was late.

Laith Khalaf, a senior analyst at Hargreaves Lansdown, said that there was an element of “investors return to business as usual” for sterling.

“There is a certain awareness of the fact that steep falls in the pound were casting too negative a light, the prospects for the currency, and the UNITED kingdom,” he said.

Trevor Greetham of Royal London Asset Management, said the pound-force is best explained by a weaker dollar.

“There has been no radical change in Brexit talks,” he said, adding that in the opposite case the pound sterling would have gained more against the euro.

The pound fell 0.2% against the euro on Tuesday to remain below €1.14.