Pound hits fresh six-week highs amid optimism after Supreme Court Brexit ruling
The pound has hit fresh six-week highs amid renewed optimism after the Supreme Court ruling on Brexit, while global stocks enjoy a "Trump rally" boost.
Sterling jumped as high as 1.26 US dollars for the first time since mid-December at one stage, as it continued to recover from falls on Tuesday, helped by a weakened dollar.
The pound had stumbled in the previous session after the Supreme Court ruled the Government does not have to consult the devolved assemblies before kickstarting the Brexit process, but soon regained its poise.
Traders said that with a Brexit bill now set to be published on Thursday, there are hopes of less uncertainty that has plagued the pound in recent months.
The pound later settled to stand 0.4% higher at 1.28 US dollars and 0.3% higher at 1.27 euros.
Neil Wilson, s enior market analyst at ETX Capital, said: "Clearly there is renewed optimism around the pound, but this seems a trifle foolhardy given we know so little at present about what the Brexit negotiations will be like."
London's FTSE 100 Index rose 16.7 points to 7167 as the higher pound held back further progress, but indices across Europe surged after fresh records overnight on Wall Street amid cheer over Donald Trump's infrastructure spending boost.
The Dax in Germany was 1.3% higher and France's Cac 40 lifted 1%.
Mr Wilson said the US stock market was set for another "landmark session".
"Some doubts about the president have subsided and we are clearly seeing a pro-business administration that is minded to action.
"That pro-growth message is being rammed home and the markets have responded," he added.
Banks were among stocks enjoying gains in London as Spanish group Banco Santander kicked off the European banking sector's results season with a respectable 4% rise in group earnings.
Santander in the UK saw annual underlying profits rise 13%, but the weak pound left its owner nursing a near-15% fall in British earnings when translated into euros.
UK rivals notched up share gains after the figures, with Royal Bank of Scotland and Lloyds Banking Group up 2%.
Telecoms giant BT edged 1% higher after Tuesday's painful 21% share plunge following a profit warning in the wake of an accounting scandal in its Italian division.