I can see clearly now: Sterling jumps to six-week high against the dollar

Emma Haslett
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Supreme Court Rules On Government's Brexit Appeal
Yesterday's Supreme Court decision pushed sterling down - but it rose this morning (Source: Getty)

The pound jumped to within spitting distance of $1.26 this morning, its highest in six weeks, as investors heralded a new age of certainty following yesterday's Article 50 decision.

The pound touched $1.2596 in morning trading, 0.6 per cent higher, while it rose 0.4 per cent against the euro to €1.1717.

Although sterling dipped yesterday immediately after the Supreme Court ruled MPs must be given a vote before Article 50 can be triggered, analysts put today's rise down to increased certainty.

"Markets continue to enjoy a degree of clarity over the UK’s path that has not been seen since June’s referendum result," said IG's Joshua Mahony.

However, he added that unless the Prime Minister treads very cautiously in the run-up to Brexit negotiations beginning, markets are likely to turn cautious again.

"With Citibank and Credit Suisse the latest banks to voice their plans to move jobs out of London, it is clear that Theresa May needs to have a robust and dramatic jobs strategy if we are going to see the UK maintain growth over the coming years."

Although analysts had expected the pound to rise on yesterday's decision, which many saw as positive for investors, the currency was hit by the Supreme Court's decision not to force the government to put Article 50 to a vote in devolved parliaments.

Forcing the government to consult the Scottish parliament in particular was seen as a route to a so-called soft Brexit.

"The pound trades like a currency that has been beaten up so much it can't easily fall further," added Kit Juckes, of Societe Generale.

"The countdown to leaving the EU hasn't really changed and the debate about the economic consequences hasn't either. If anything, I'm more alarmed at the flurry of companies reporting a negative impact on profits from rising raw material prices, and the number announcing price rises. The hit to real wage growth is coming."

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