The British Pound Sterling, on Tuesday December 6, traded positively, remaining near the top of a multi-week uptrend that has resulted from five consecutive weeks of gains against the Euro and three consecutive weeks of gains against the Dollar.
As a result, the British Pound’s Effective Exchange Rate has meanwhile recovered towards 78.81, PoundSterlingLive reports.
The Effective Exchange Rate is a measure of Sterling’s value against a basket of its most important counterparts based on trade and is therefore a good gauge as to the currency’s overall health.
multi-week recovery is forecast to reverse early in the new year we are told by a leading technical analyst.
GBP trades with a positive bias on Tuesday December 6 as the short-squeeze higher in the Euro that defined the markets following the Italian refernendum fades and allows the UK currency to maintain its trend of appreciation, in place since October.
The US Dollar and Euro are understandably the largest constituents of the basket owing to the UK’s large trading links with Europe and the United States.
The recovery in Sterling come as the hard-Brexit story gives way to suggestions the UK government could push for a continued membership of the European Union’s single market, even if that access is paid for.
Sterling remains a currency largely driven by sentiment at present and this is certainly likely to be the case over the next year as the UK finally starts to hammer out its future relationship with the EU.
