Pound Sterling (GBP)

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Holidaymakers lucky enough to travel into Europe during the February half-term holiday are getting an extra boost from the value of the pound.

Sterling is close to its highest level against the euro since the immediate aftermath of the EU referendum, with tourist rates also at recent highs.

The pound is fetching more than €1.17 in bureaux de change, but there are warnings that far worse rates are offered in airports.

Meanwhile, the pound is continuing to trade at about €1.20 and $1.30 on the currency markets, where rates are higher than those offered to tourists.

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The pound is still trading around the €1.20 and $1.30 levels, largely hanging on to the gains it made after Rishi Sunak was announced as the new chancellor. But at least one expert, Prof Costas Milas of the University of Liverpool's Management School, thinks it's an "extremely premature" rise that finds the currency "wrong-footed" by news of Sajid Javid’s resignation.

"Markets are rushing to value positively the prospect of looser fiscal policy which will, presumably, stimulate the economy. Unfortunately, currency celebrations are really premature," he says.

"What financial markets are missing is that [Mr] Javid’s departure has to do with his refusal to allow sound economic policy to be dictated by non-economic experts and the political cycle.

"In other words, future economic policy will most likely be clouded by a mixture of political considerations and an increased risk of 'boom and bust' fiscal expansion."

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The pound "seems to like this reshuffle," says Neil Wilson of Markets.com.

He notes that the pound fell against the dollar after Sajid Javid resigned as chancellor. But it swiftly rebounded through 1.30 toward 1.30240 when Rishi Sunak was announced as his replacement.

Gilt yields also moved higher, with the market betting on "more spending, less austerity and more growth," under the new chancellor.

Mr Wilson describes the move as a "blatant power grab by Boris and Cummings over the Treasury".

"Boris Johnson is taking the Kirstie Allsopp approach to how to make Number 10 and Number 11 work for him: that is, just knock through.

"The fiscal floodgates are about to open – whatever brake the Treasury might have had on Number 10 has been cut entirely with this move."

BBC

The pound slid more than 1% against the dollar yesterday on fresh fears of a no-deal Brexit and then fell further this morning to $1.2946.

But it's now bounced back slightly and stands at $1.3008, up 0.08% on the day.

Against the euro it's climbed 0.14% to €1.1769.

BBC

The pound has fallen more than 1% against the dollar this morning on renewed no-deal Brexit fears.

It's slipped to $1.3066 against the dollar and to €1.1800 against the euro.

Neil Jones, head of FX sales for financial institutions at Mizuho Bank, said market concerns over a hard Brexit are coming to the fore again and putting negative pressure on the pound.

“My sense is investor fears of a no-deal scenario will resurface,” he said.

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The Financial Conduct Authority will investigate a rise in the pound just before Thursday's Bank of England's interest rate announcement.

Sterling rose a minute before the Bank said it would keep the interest rate on hold at 0.75%.

The Bank of England said it had asked the FCA to investigate what had happened.

"We are aware of the incident and are looking into it," the FCA said.

Simon Harvey, forex analyst at Monex Europe, said: "There were a few gasps around the room when we saw the price jump quite aggressively.

"We are not used to seeing a big jump beforehand and so it raised eyebrows."

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The pound has risen 0.35% against the dollar to $1.3067 after the Bank of England's Monetary Policy Committee voted to hold the interest rate.

Sterling also gained against the euro, up 0.21% at €1.1849.

The MPC made clear, however, that it may act if the UK economy fails to gain momentum.

"With Mark Carney seemingly having deferred this policy decision to his successor, Andrew Bailey will need to land on his feet running," says Principal Global Investors' market strategist, Seema Shah.

"Unless economic activity data improves measurably over the coming months, reflecting proof of the so-called 'Boris bounce', and interest rate cut is likely to remain on the agenda for 2020.".

BBC

The pound has been steady this morning ahead of a possible rate cut later this week.

In early trading sterling has climbed 0.03% to $1.3068 but remaisn below a two-week high of $1.3180 it touched on Friday.

Against the euro, sterling is at €1.1860, up 0.04% on the day.