Sterling traded at $1.4354 yesterday, its highest value against the dollar since June 2016, as crucial talks are due to begin this week on the UK’s future trading relations with the European Union.
So far this year, the pound has gained 5.8% against the dollar, and is the strongest performing currency among the G10. The renewed confidence comes on the back of the conditional agreement reached last month between London and Brussels on a transition period following the country’s formal withdrawal from the EU.
Yet analysts remain cautious ahead of the country’s trade talks that are being held later this week. There is, for example, no significant progress on the vital and sensitive issue of the Irish border.
The new high is still considerably wide of the $1.49 level the British currency traded at just before the vote to leave the EU, and against the euro the pound remains relatively weak, at €1.15 compared to €1.27 in June 2016.
On Wednesday morning the pound was trading at $1.4305.