MARKET REPORT

THE pound pushed higher yesterday as investors piled back into UK currency just days after the trigger of Article 50.

Sterling rose 0.6% against the US dollar to 1.254, and climbed 0.4% versus the euro to 1.172.

The currency was on the rise as pessimistic trading positions started to expire.

Investors who shorted the currency ahead the Government’s official trigger of Article 50 earlier this week – essentially betting that sterling would weaken – have been buying pounds now that those positions have come to a close.

Jane Foley, a senior FX strategist at Rabobank, said: “On the back of short-covering pressures, sterling pushed higher in the wake of the official start of the Brexit process.

“That said, the negotiations on the terms of the separation are yet to commence,” she said, adding there might be further downward pressure on the pound if there is not a quick compromise on a Brexit deal.

The pound’s rise weighed on multinational stocks on the FTSE 100, which tend to benefit when foreign currencies are stronger.

London’s blue chip index ended the day down 0.6% or 46.6 points at 7,322.92.

Investors were also digesting a slew of data from the Office for National Statistics, which confirmed fourth quarter gross domestic product growth at 0.7%.

However, attention turned to the households savings ratio, which fell to a record low of 3.3% in the final three months of 2016, as consumers tried to keep up spending in the face of rising inflation.

In oil markets, Brent crude prices were flat at 53.05 US dollars per barrel (£42.39) as investors continued to fret over the prospect of US supplies offsetting Opec efforts to cut production and boost prices.

In UK stocks, Entertainment One shares surged 13.4p to 244.6p as the owner of Peppa Pig cheered rising revenues, driven by £200m worth (£161m) of merchandise sales from the popular children’s cartoon. It said US retailers had bolstered their product ranges after 65 Peppa Pig retail licences were rolled out across America before Christmas.

Speedy Hire shares rose 0.75p to 53p as the tools and equipment rental company said it was on track for a 7% rise in group revenue for the year ending March 31. The biggest fallers on the FTSE 100 were Old Mutual down 16.3p to 200.6p, Mediclinic International down 47p to 712p and Anglo American down 43p to 1,219.5p.