The British Pound Sterling rose 0.75 percent against the dollar to $1.2506. The GBP’s move higher against the dollar was buoyed by UK data that showed lending to Britons expanded in October at the fastest annual pace in 11 years.
Sterling has performed strongly against the euro as concerns about political risk in the European Union and Donald Trump’s victory have shifted sentiment
The UK currency has held firm in November, rising nearly 2 per cent versus the dollar and set for its best monthly performance since January 2009.
The Bank of England’s effective exchange rate index, which measures the value of the pound on a trade-weighted basis, is 4.8 per cent higher since the start of November.
This comes after the index slumped to an all-time low in October in the wake of the country’s Brexit vote.
The pound’s particularly strong November performance against the euro, up 5.1 per cent, has driven the rebound in the index, given the importance of the single currency bloc as a trading partner. The US, Japan, China and Switzerland are next in terms of importance as trading partners for the UK.
Sterling’s strong November performance cannot mask its five successive months of decline after the vote for Brexit. That period was bookended by Brexit in June, during which the trade-weighted index fell 8 per cent, and the flash crash in October, a month that saw the index decline 4.2 per cent.
From a peak of 87.76 on June 23 to the 73.72 trough of October 17 when it hit its lowest level on record, the index has fallen 16 per cent.
The pound still has a way to go to breach long-term resistance levels against the dollar, although there is a breakthrough against the euro.
