The UK currency is up as markets see greater clarity over the political future after the emergence of the new Tory leader.
Sterling's value rose though it is far below levels seen before the EU referendum result
The pound
has surged by more than three cents against the US dollar in the past
24-hours, boosted by increasing political certainty as Theresa May
prepares to take over as prime minister.
Sterling was above $1.33 early on Wednesday as
traders continued to take stock of developments in Westminster - though
it remains far below the levels seen before last month's EU referendum
result.
The currency had spiked at $1.50 on 24 June when markets were expecting a Remain win, before plummeting by an unprecedented 18 cents to $1.32, a level not seen since 1985, as it became clear that Leave would win.
Last week, with the prospect of a lengthy Tory leadership battle to come before a new PM was decided, the pound slipped below $1.28.
But with Mrs May just hours away from taking her place as the new incumbent of 10 Downing Street, it was on the rise.
Tony Cross, market analyst at Trustnet Direct, said: "The City
is no fan of uncertainty so the fact that we now have a new prime
minister should at least start to pave the way for the next chapter when
it comes to Brexit."
Hussein Sayed, chief market strategist at FXTN, said the relief rally for sterling was likely to be short-lived as many questions about the political future remained unanswered.
Meanwhile, the FTSE 100 has been trading at 11-month highs as the fall in the value of the pound since the referendum has boosted the sterling value of overseas incomes of many of its largely-global firms.
It was little changed in Tuesday's session as sterling recovered, while markets in Europe saw strong improvements as investors hoped for central bank stimulus to stave off slowdown fears.
The Bank of England's rate-setting committee meets later this week amid expectations of an interest rate cut.
Trading in shares was more subdued on Wednesday. While the FTSE 100 remained largely flat, European markets were reflecting renewed concerns for the eurozone's banking sector - particularly lenders in Italy.
The currency had spiked at $1.50 on 24 June when markets were expecting a Remain win, before plummeting by an unprecedented 18 cents to $1.32, a level not seen since 1985, as it became clear that Leave would win.
Last week, with the prospect of a lengthy Tory leadership battle to come before a new PM was decided, the pound slipped below $1.28.
But with Mrs May just hours away from taking her place as the new incumbent of 10 Downing Street, it was on the rise.
Theresa May is preparing to succeed David Cameron as prime minister
Hussein Sayed, chief market strategist at FXTN, said the relief rally for sterling was likely to be short-lived as many questions about the political future remained unanswered.
Meanwhile, the FTSE 100 has been trading at 11-month highs as the fall in the value of the pound since the referendum has boosted the sterling value of overseas incomes of many of its largely-global firms.
It was little changed in Tuesday's session as sterling recovered, while markets in Europe saw strong improvements as investors hoped for central bank stimulus to stave off slowdown fears.
The Bank of England's rate-setting committee meets later this week amid expectations of an interest rate cut.
Trading in shares was more subdued on Wednesday. While the FTSE 100 remained largely flat, European markets were reflecting renewed concerns for the eurozone's banking sector - particularly lenders in Italy.
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