The Independent’s journalism is supported by our readers. When you purchase through links on our site, we may earn commission.

Pound Dollar exchange rate: Sterling near eight-month high but caution dominates as election and Brexit loom

Sterling cracked through the psychologically important $1.30 mark for the first time since late September last week

Despite the pound's resilience, strategists and investors are still displaying caution
Despite the pound's resilience, strategists and investors are still displaying caution

The pound continued to trade near an eight-month high against the US dollar on Monday, as political uncertainty showed no signs of loosening its grip on the US currency.

Late afternoon in London, sterling was trading just above $1.30, having cracked through that psychologically important mark for the first time since late September last week.

The dollar was trading slightly higher against a slew of currencies. Last week it slumped to its lowest level in six months, after reports that Donald Trump had asked former FBI Director James Comey to end an investigation into National Security Adviser Michael Flynn during an Oval Office visit back in February.

Despite the pound's relative resilience in recent days though, strategists and investors are still displaying caution ahead of the 8 June general election and as Brexit negotiations get under way.

Strategist at UniCredit wrote in a note on Monday that they still deem it too early to “turn sterling-bullish”. They said that the recent move above $1.30 “largely reflects a weak dollar rather than renewed confidence in the [pound]”.

See how much you could save on international money transfers with HiFX: sign up and make a transfer

“Recent data releases suggest that as UK inflation is rising while nominal wage growth remains unchanged, domestic real incomes and real rates are being compressed, setting the stage for a more vivid divergence between the euro area and the UK over the next few months,” they write.

Because of that, they said that they still favour the euro over the pound.

Elsewhere on Monday, the FTSE 100 ended the session up 0.3 per cent.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in