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Sterling hits 7 month high against dollar

Sterling rose around half a percent to 7-month highs above $1.29 this morning, helped by a broader softening of the dollar and polls showing Prime Minister Theresa May on course for a landslide in the early election she has called for June.

The pound rose by as much as 4 cents when May announced the election nine days ago but investors have looked unsure about driving the pound higher in the days since.

Euro-area economic confidence jumped to the highest in almost a decade this month, a testament to a continued improvement that may soon prompt a policy shift at the European Central Bank.

The report may sway the ECB Governing Council’s assessment of the 19-nation economy as it prepares to announce its policy decision later today. While no changes to interest rates or asset purchases are expected, most respondents in a survey say an improved outlook will allow President Mario Draghi to revise forward guidance as early as June, sooner than previously anticipated.

The economy appears to be on increasingly strong footing, and political risks have diminished somewhat after the first round of France’s presidential elections.

Manufacturing sentiment in the country, the region’s second-largest economy, rose to a six-year high in April. In Germany, business confidence surged. Data next week is expected to show the euro-area economy grew 0.4 percent in the three months through March.

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