The pound has risen further to the heady heights of $1.29. It is now trading above that level at $1.2916, the highest in four months and up almost 0.2%.
Sterling has been boosted by a general slide in the US dollar, and a brighter mood in markets after a reprieve on US tariffs and the prospect of higher infrastructure and defence spending in Europe, led by Germany.
The dollar slid further against a basket of major currencies, after news that Donald Trump will exempt carmakers from 25% tariffs on Canada and Mexico for a month as long as they comply with free trade rules.
The euro also continues its rally and has hit a four-month high against the dollar, amid optimism sparked by Germany’s proposed €500bn infrastructure fund and overhaul of its borrowing rules. The European single currency rose by 0.3% to $1.0820 for the first time since 7 November.
Asian stock markets bounced, led by Hong Kong’s Hang Seng, up by 3.06%, while Japan’s Nikkei climbed by 0.77%. In China, the Shanghai Composite rose by 1.17%, while the Shenzhen Composite gained 1.77%. The South Korean Kospi added 0.7%.
The German stock market has extended gains, with the Dax in Frankfurt opening 1.1% higher. Investors have been cheered by what economists nickname Berlin’s “big bazooka”, a fiscal sea change that could revive the German economy.
Other European stock markets are also pushing higher, extending yesterday’s rally. France’s Cac is 0.6% ahead, while Italy’s FTSE MiB has climbed more than 1%. The pan-European Euro Stoxx index has risen by 0.5%.
The FTSE 100 index in London is bucking the trend, down by 0.2% or 17 points at 8,737.
The European discounter Pepco Group said it is evaluating all strategic options to separate its struggling 825-store Poundland business in Britain this year, including a potential sale.
Ahead of an investor day, the Warsaw-listed group, which also owns the Pepco and Dealz brands, said it would focus on the Pepco brand “as the single future format and engine driver of group earnings.” The agenda • 9.30am GMT: UK S&P Global construction PMI • 10am GMT: eurozone retail sales for January • 1.15pm GMT: European Central Bank interest rate decision (quarter point cut forecast) • 1.30pm GMT: US trade for January, initial jobless claims for week of 1 March • 1.45pm GMT: ECB press conference • 2.45pm GMT: ECB staff macroeconomic projections • 3.15pm GMT: ECB president Christine Lagarde speech • 8.15pm GMT: Bank of England policymaker Christine Mann speech We'll be tracking all the main events throughout the day …
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