Sterling Soars Above $1.38 for the First Time Since Brexit Vote


This morning, the sterling has soared above $1.38 for the first time since the Brexit vote.

The pound has been raised by reports saying that the Netherlands and Spain are seeking out a soft Brexit, combined with a comparatively favourable political climate in Westminster.

Meanwhile, the inflation data of the consumer price index (CPI) is expected today. If the Bank of England sees signs of a pick-up in the core components of inflation, it could impel the interest rate-setting monetary policy committee to constrict monetary policy sooner than the market presently believes – a benefit for sterling.

Inflation rose at 3.1 percent in the year to November, well above the two percent target that was set by the Bank of England.

However, the success of sterling could be restricted by the collapse of Carillion, which is likely to have wide-reaching consequences for businesses in the United Kingdom.

The head of UK corporate dealing at RationalFX, William Anderson Jones, stated: “Despite the positive outlook for sterling, investors will be watching the currency closely today as the collapse of construction giant Carillion unfolds.

“With the impact expected to be felt by suppliers and small businesses, analysts will be looking for any signs that it could weigh on the pound in the coming days. With economic data for the end of last year highlighting a slight slowdown in the UK construction sector, it remains to be seen how the collapse might impact on future figures for the sector, and the wider economy.”