Kit Juckes, head of currency strategy at Societe Generale, said he did not believe sterling's recovery would last.
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However, he added that "there is a lot of uncertainty in the world" and that there was stability with a new British government helping the pound.
A stalemate in the French parliament and turmoil in the US presidential campaign, with the attempted assassination of Republican candidate Donald Trump on Sunday, as well as doubts about President Joe Biden's ability to remain in office for another four years, have increased nervousness in global markets.
On Wednesday, King Charles outlined Prime Minister Keir Starmerand's plans to revive the economy, with a focus on implementing new housing and infrastructure projects.
Emma Wall, head of investment research and analysis at Hargreaves Lansdown, said: "Inflation is on track - and if we're worried about decimal numbers, marginally low - along with a King's Speech full of ambitious reforms and an agenda. High growth has caused the pound to rebound.
He added that the key to sustaining the recovery will be the latest economic data and the Bank of England interest rate decision due to be announced on August 1.
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