Since the British vote to leave the EU, the pound against the dollar has soared to its highest level after earlier reports that Spain and the Netherlands are willing to withdraw from the Brexit trade in Britain.
The pound hit a high of $ 1.3691, or nearly 1.5 cents, or more than 1%. Earlier, Bloomberg reported that after Britain removed from Europe, the two countries hoped to maintain the most possible connection between Europe and Britain.
The pound converted $ 1.49 before the British vote was taken on June 23, 2016, but the pound plummeted when the British public voted to leave the European Union. In January 2017, the figure hit a low of $ 1.20.
Bloomberg reported: “Spanish Foreign Minister Luis de Genizi and his Dutch counterpart Hoc Stradi met earlier this week and discussed their common interest in Brexit in the United Kingdom.
“The two countries have close trade and investment ties and are concerned about the impact of tariffs, and they are worried about losing Britain’s contribution to the EU budget.
A Spokesman for the Spanish Ministry of Economy said that the two finance ministers discussed the importance of the two countries and agreed to continue discussions on common interests while supporting Michel Barnier, EU’s chief Brexit negotiator. Hoekstra spokesman declined to comment.
However, Neil Jones, head of European hedge funds at Mizuho Bank, played down the significance of the discussion. “This is not as important as the rally was saying, simply because two out of 27 members say that does not mean that Brexit will become softer and I suspect it is so simple.”
Analysts said the pound was also driven by a weaker dollar. Neil Wilson, senior market strategist at ETX Capital, said: “The pound rose 1% today, reaching its highest post-Brexit gain since the pound was weaker, while some good news from Brexit once again pushed the pound .
The pound climbed slightly against the euro at 1.1256, but the pound strengthened after the German Union negotiated a breakthrough, pushing a gain of 0.1%.
The pound sterling plunged since the Brexit vote pushed up the cost of importing goods and services from abroad. As a result, inflation rose from 0.5% in the June 2016 -the month of the referendum to 3.1% in November. As the growth of wages in the United Kingdom failed to keep up with the pace of price increases, domestic financial pressure increased.
However, Britain’s export competitiveness is stronger. Data from the National Statistical Office (ONS) showed earlier this week that the British factory increased its output for the eighth consecutive month in November last seen in May 1994.