Sterling ends the week on a high as hurricanes hit the dollar

Lucy White
Sterling Rates To Fluctuate During Brexit Negotiations
The pound's strength caused the FTSE to flounder (Source: Getty)

The pound soared to a post-Brexit high against the dollar today, after hawkish comments from one of the Bank of England's doves this morning got sterling off to a good start.

This continued the gains made yesterday, as Bank policymakers hinted an interest rate hike could come in a matter of months.

Meanwhile the US dollar was battered by the effects of a series of hurricanes. Retail sales dropped from 0.3 per cent in July to negative 0.2 per cent in August, with Hurricane Harvey blamed for the decline. The industrial production reading plunged by 0.9 per cent.

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This caused sterling to rise against the dollar to highs not seen since the Brexit referendum, hitting $1.35 at the close of trading.

The pound's strength caused the FTSE to flounder, as it closed down 1.16 per cent. But the FTSE's loss was the Dow Jones' gain, as the US index reached another all-time high in early trading, and was up 0.18 per cent at the time of writing. According to Connor Campbell at spread betting firm SpreadEx, the Dow Jones looks set to close the week above 22200 for the first time in its history.

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The euro also climbed against the dollar, although fell against the rampant pound. The eurozone currency's decline against sterling did little for European indexes, as Germany's Dax and France's CAC both finished the day down.

The “bullish sentiment that existed at the beginning of the week has now been replaced with sideways trading” in Eurozone equity markets, said analyst David Madden at CMC Markets.

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