* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv
LONDON, Jan 23 (Reuters) - Sterling briefly popped above
$1.40 on Tuesday, extending a rally since the closing days of
last year on growing investor optimism about the near-term
outlook for the British currency.
Protracted dollar weakness and optimism that Britain will
reach a favorable divorce deal with the European Union has
powered a 3.5 percent rally in the British pound since
the last week of December.
"Sterling is benefiting from the broad dollar weakness story
and the recent data has been mildly supportive," said Thomas
Flury, head of FX Strategies, UBS Wealth Management, Chief
On Tuesday, it rose above the $1.40 level in early Asian
trading to a post-Brexit high of $1.4005. On a year-to-date
basis, it is the best performing major currency, beating even
the euro which is up more than 2 percent in that
period thanks to a rapidly improving economy.
At 0745 GMT, sterling was trading at $1.3965 against the
dollar. Against the euro, it was broadly flat at 87.73 pence
Data on Friday showed that speculators on the Chicago
futures exchanges increased their net long sterling positions -
or bets that it will rise - to the highest level in 3-1/2 years,
on the view that Brexit talks had so far gone relatively well
and that the UK economy was ticking along better than many had
(Reporting by Saikat Chatterjee)
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