Sterling Reaches its Highest Since the Brexit Vote

This afternoon, the pound partied hard after reports regarding good news for the negotiators of Brexit  – as the FTSE 100 closed the week by breaking yet another record.

Sterling started the evening over one percent higher against the dollar, while it had a 0.2 percent increase against the euro as reports that the Dutch and the Spanish were seeking a soft Brexit followed the news of the ruling CDU party of Angela Merkel had entered the next stage in coalition discussions.

The pound rose to $1.3680 against the dollar, the highest ever since the Brexit vote, and €1.1281 against the dollar.

Meanwhile, the FTSE 100 sailed to a record close at 7,778.64 points, having achieved an intraday high of 7,790.9 points earlier this afternoon.

The index was driven higher by GKN, an engineering firm, which shot up by over 28 percent following its announcement that the company had received an unsolicited takeover offer from Melrose Industries.

Rolls-Royce and Smiths Group also climbed on the news, increasing by 3 percent and 6.8 percent respectively.

The chief market analyst at IG, Chris Beauchamp, stated: “Currencies are all the rage this afternoon as the euro and sterling both gain on hopes of political developments in two key stories, namely the German coalition talks and the next round of Brexit negotiations.

“Even with renewed sterling strength the FTSE 100 has been able to clamber to a new high. Bullishness is rampant among investors, who appear to be tripping over themselves in a race to buy US and UK equities. Europe remains the unloved area, however, as markets begin to fret about a potential ramp-up in monetary tightening by the ECB.”