Pound Rallies Over $1.41 To Highest Since February
The pound has surged on the foreign exchange markets today, thanks to a cocktail of economic optimism and fading political risks.
Sterling has jumped over a cent and a half to $1.414 against the US dollar, its highest level since late February – and on track for its best day since at least January.
It also jumped over a euro cent to €1.163 tonight, its best session this year.
Several analysts said that worries over an early Scottish independence referendum had faded, after the SNP narrowly missed winning an overall majority in the Scottish parliament.
As Lee Hardman, a currency analyst at MUFG Bank, says:
However, the SNP have insisted they will push for a second referendum, meaning a constitutional clash with London could lie ahead.
Hopes that the UK economy will rebound this year also lifted the pound, after the Bank of England hiked its growth forecasts last week, and the government confirmed that the next step of easing lockdown will take place next week.
The pound’s strength dragged on the FTSE 100, where banks, housebuilders and other UK-focused companies had a good day.
European markets nudged higher, as investor confidence across the eurozone hit its highest since 2018.
In New York, the Dow Jones industrial average has hit a fresh record high, over 35,000 points for the first time, but technology companies are sliding.
UK house prices hit a new peak too, with growth at its strongest in five years – triggering warnings that ‘Fear of Missing Out’ was driving the market.