During early trading, the pound shortly nosed above $1.43, which is recorded as a post-Brexit vote high, as the euro possessed a three-year high against the US dollar ahead of the first meeting of the European Central Bank (ECB) for this year.
In morning trading, the pound grew as high as $1.4326 while the euro was able to breeze to $1.2458, having improved to its highest since the end of 2014 on Wednesday.
The dollar was driven lower by the comments of Steve Mnuchin, the US treasury secretary, at Davos, who implied that a weaker US dollar is “good for us as it relates to trade and opportunities.”
“[Mnuchin] also pointed out that he isn’t concerned by where it is in the short term and that in the longer term, its strength is a reflection of the strength of the US economy,” stated the macro strategist at Societe Generale, Kit Juckes.
“In other words, he said very little really, but he said it under snow-plastered slopes, and he was speaking to a market where dollar bulls have been under the cosh. A few more capitulated.”
The euro was also strengthened by hopes that the ECB will keep the interest rates on hold when the board meets today. Some analysts suggested that the president of the bank, Mario Draghi, will try to weaken the euro following its winning streak against the US dollar during the past weeks.
“It is likely [Draghi] will express concerns for the relatively low level of inflation, in a bid to talk down the value of the euro,” stated a market analyst at CMC Markets UK, David Madden.