As the market reopened for 2018, the British pound sterling advances and capped a three-month-high against the United States dollar. Sterling settled at $1.3598 which was 0.7% higher from its previous settlement and hovers near $1.36. In accordance to this, the British pound sterling also indicated its best annual performance in 2017 against the greenback since 2009, with an approximate rise of nearly 10%.
Against the single currency, the British pound sterling advances to 88.71 pence which was 0.2% higher from their previous settlement.
The positive stance of the pound was also reinforced by analysts and investors, as their focus are now pinned on the progress of the Brexit negotiations for the year 2018. In which, Jane Foley, Rabobank currency strategist mentioned that even though the pound’s positive start seems to be a bit of a disappointment, it is still considered as a good figure, and that the Brexit still remains a major matter for the currency.
In addition, Jane Foley mentioned that German Chancellor: Angela Merkel, whose success in establishing a governing coalition in order to secure a fourth term in the office could also impose a crucial threat for the British pound, as there has been some speculation that Merkel was something of an ally for Britain and would want to get Britain an assenting trade negotiation.
In accordance to this, a currency strategist at MUFG or the Mitsubishi UFJ Financial Group wrote in a note that the course of Brexit negotiations will be important and developments in the coming weeks are considered important, given that MUFG expect a transition deal to be struck quickly.