UK Economics

Does optimism about Brexit explain the pound’s rise?

Brexit Watch
Written by Capital Economics Economist

With the rise in the pound to its highest level against the US dollar since the eve of the EU referendum not appearing to be justified by relative interest rate expectations, some have argued that it may reflect investors becoming more optimistic, or perhaps less pessimistic about Brexit. But recent developments don’t really appear to support this notion, suggesting that the explanation lies more with the dollar.