Sterling climbed to a two-week high against the dollar yesterday in rather astonishing circumstances. With no major economic data releases from the UK, any moves were likely to be fuelled by events elsewhere or reports of Brexit developments. However, as it turned out, it was neither, with the strengthening coming following an ambiguous gesture from Dominic Raab.
Upon leaving Downing Street after a Cabinet meeting, the Brexit secretary gave reporters a verbal ‘thumbs up’ and the pound jumped. Let’s be clear here: Raab didn’t even put his thumbs up, instead he just said ‘thumbs up’. There were no further indications on whether this referred to how the Cabinet meeting went, whether there was progress on the Irish backstop, whether he remains optimistic, or something else entirely. Still, it was enough for investors to send sterling to its highest mark against the dollar since 22 October 2018.
October’s Halifax house price index figures will be released this morning, with month-over-month growth expected to bounce back. Year-on-year, the figure is expected to drop to 1.2% from 2.5% the previous period.