Pound to dollar exchange rate: Sterling hits highest level since Brexit referendum

The pound has hit its highest rate against the dollar since it plummeted in the wake of the Brexit referendum result.

Sterling ralled to reach 1.435 versus the dollar on Tuesday morning, up nearly 0.2 per cent, having first risen to those levels during Asian trading overnight.

It is the strongest level recorded since the EU referendum result was announced on June 24, 2016, which sparked a sharp decline from a high of 1.50 against the US currency.

Gains against the euro were less pronounced, trading up 0.05 per cent at 1.158, though it still marked its highest point since May 2017.

Experts said anticipation of a Bank of England interest rate hike on the back of Tuesday's jobs data was helping support the pound.

The research team, led by Jasper Lawler at London Capital Group, said: "Overnight the pound struck 1.435 US dollars, its highest level since the Brexit referendum in anticipation of a more hawkish BoE (Bank of England) at the next MPC (Monetary Policy Committee) meeting in May.

"Traders are looking optimistically towards today's UK jobs data, with expectations that it will support a spring rate rise by the central bank.

"Whilst UK unemployment is forecast to remain constant at 4.3 per cent, average earnings are forecast to hit 3 per cent in the three months to February.

"Given that inflation was 2.7 per cent in February, we could start to finally see the pressure of falling wages in real terms ease for the UK consumer.

Last month, two of the nine Monetary Policy Committee (MPC) members voted to hike Bank of England interest rates to 0.75 per cent, marking the first split vote since last November when rates were raised from 0.25 to 0.5 per cent.

Dollar weakness also played a part in driving the UK currency higher, having fallen on the back of further social media posturing by US President Donald Trump.

Michael Hewson, chief market analyst at CMC Markets UK, said: "The US dollar continued to sink yesterday, pressured to some extent by a rather bizarre tweet from President Trump that claimed that Russia and China were playing a devaluation game with their currencies, when the evidence doesn't support that assertion at all."

Additional reporting by Press Association