The start of the new year has been good for the Sterling against the expectations. Due to the political uncertainty regarding Brexit policies, Sterling suffered a major blow after the Brexit vote in June. However, economic data revealed that the country’s economy is not as worse as it was feared. This supported Sterling a little bit during the first week of trading in the new year. For the second consecutive day, Sterling rose against the US dollar, allowing the currency to gain against the Greenback as well.
The UK services sector data supported the Sterling, taking away some of its pressure earlier on Thursday. When the US job figures were released, it disappointed the market and it resulted in the weakening of the dollar. Sterling which was rising against the dollar continued its strengthening. Sterling finished at $1.2432 which is 0.9% higher than the previous session. It can be considered as one of the best days for Sterling against the dollar since December.
However, Sterling was weaker against both Euro and Yen. Sterling lost 0.3% against Euro and 0.8% against Yen. The session ended with Sterling trying to overcome the losses. According to the Purchasing Manager Index PMI of UK, the economy grew at a faster pace in December. In 2016, 2.69 million new cars were sold which is a new record for car sales in the UK. This simply means that the UK economy is much more resilient towards Brexit negotiations. However, the gloom around the currency continues to prevail.