Sterling hits two-week high against the dollar as fears over Trump presidency take their toll

Natasha Clark
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Sterling rose to a two-week high against the dollar this morning pushed by uncertainty surrounding the US elections.

The pound, which has fallen by around 20 per cent since the UK voted to leave the EU, has taken a slight boost today. It has risen around one per cent this week, also pushed up by the news that Mark Carney, the governor of the Bank of England, will extend his tenure until 2019 to see through Brexit negotiations.

The pound climbed a third of a per cent on Wednesday morning to $1.2318, its highest level since October 20. Against the euro, the pound was steady at €1.11.

But analysts thought the news was more about the dollar than the pound. Donald Trump has been edging closer in opinion polling over the last few days, amid fears that he could secure the US presidency.

Read more: Moody's could downgrade the UK again if it gets a poor Brexit deal

"That is more about the slight weakness in the dollar than any great strength in sterling," said Richard Wiltshire, chief FX broker at ETX capital. "Brexit is the primary driving force at the moment. Any rallies in sterling are capped by the fear of the unknown."

The pound did not react much to the news that growth in the purchasing managers' construction index had jumped to a seven-month high in October.

Investors are looking ahead to Thursday's quarterly inflation result, which could see predictions pushed up as the pound stays low overall.