Sterling rallied to a near three-month high on Monday, as the last of the election results were confirmed and the loosening of lockdown restrictions remained on track.
As at 1015 GMT, sterling was trading at $1.41, and at 1.16 against the Euro. This is the first time since late February sterling has breached $1.40.
Connor Campbell, financial analyst at Spreadex, said: “Reports that the UK government is pushing ahead with its lockdown-easing plan, regardless of concerns over the Indian Covid-19 variants currently circulating, gave the pound a shot in the arm.
“This appeared to counter any concerns the currency may have had over the SNP’s renewed push for a referendum on Scottish independence and sent the pound up 0.5% against the dollar and 0.7% against the Euro.”
Sterling has been further supported by weaker-than-expected US employment data on Friday, which weighed heavily on the greenback.
Neil Wilson, chief market analyst for Markets.com, said: “Sterling jumped to its strongest since late February as the dust settled over the spate of UK elections on Thursday, and a weaker dollar resulting from the non-farm payrolls miss.
“Boris Johnson’s position looks secure, Labour is in disarray and Nicola Sturgeon has regained control of the Scottish Parliament. Near-term worries about a second referendum on Scottish independence appear to have retreated somewhat; the SNP are biding their time, not pressing ahead immediately on a referendum.
“For now, sterling traders can afford to ignore the noise and focus on the near-term economic trends. With the break of $1.40, at last bulls can consider the 24 February peak at $1.425.”
Naeem Aslam, chief market analyst at AvaTrade, said: “Sterling [is] gathering more momentum after the elections, which strengthened Boris Johnson’s position as prime minister.
“In addition to this, optimism continues to grow on the coronavirus vaccine front as England will ease off coronavirus-related restrictions further on 17 May. The infection rate has reached its lowest reading since September, and nearly two-thirds of people in the UK have received both doses of the vaccine.”
