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Sterling continued to ratchet up gains against the US dollar on Monday as the buck sharply narrowed the advance made since Donald Trump won the Presidential election in November.

The pound rallied 1.1 per cent to $1.2609 — the highest level since early February — after the Republican healthcare overhaul was scuppered on Friday, raising concerns about Mr Trump’s ability to deliver on his campaign promises of tax reforms, infrastructure spending and a softer stance on regulations.

The DXY dollar index, which measures the buck against a basket of peers, was down 0.7 per cent at pixel time. It remained up by 1.1 per cent since Mr Trump’s election victory in November, but that represents a significant decline from the 5.6 per cent rise that was marked on December 28.

The pound’s advance also comes as UK prime minister Theresa May is expected to formally trigger article 50 on Wednesday and commence two years of negotiations on the UK’s exit from the EU.

Copyright The Financial Times Limited 2017. All rights reserved.

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