Investing.com - The pound moved higher above most major currencies into Thursday afternoon as Emmanuel Macron was welcomed into Britain ahead of the 35th Anglo-French summit.
At 12:10 GMT, GBP/USD was up 0.36% to 1.3880. On Wednesday cable pushed above the 1.39 level, the highest level since June 2016.
Prime Minister Theresa May will hold talks with French President Emmanuel Macron at Sandhurst, the UK’s military training academy. The talks are hoped to forge greater ties between the two countries, particularly ahead of the upcoming Brexit negotiations, which will focus on the future trade relationship between the UK and the European Union.
It is expected that May will pledge an extra 14.5 million pounds for border security at the port town of Calais in northeastern France. Macron also announced earlier this week that he will lend the Bayeux tapestry to the UK, for the first time in ovr 950 years.
These gestures of goodwill between the countries hint that a softer approach to Brexit is being considered by Theresa May. In her Lancaster House speech one year ago, May famously said that no deal for the UK when it exits the EU would be better than a bad deal.
Last Friday, the pound hit highs not seen since the June 2016 referendum on news that Spain and the Netherlands would support a soft-Brexit. The news was quickly denied by both countries, however sterling continued its rally.
The UK's Royal Institute for Chartered Surveyors (RICS) found that house prices in the UK unexpectedly increased in December, up from the lowest level since March 2013.
The pound sat fairly flat for most of Thursday morning, as the dollar pushed higher as some of the more dovish Federal Reserve members talked-up the prospect of three interest rate hikes for the Fed in 2018.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped on Thursday and was down 0.34% at 90.34, off the previous session's fresh three-year low of 89.97.
The euro made gains against the dollar on Thursday. EUR/USD was up 0.47% to 1.2243. The single currency pared gains against the pound. EUR/GBP was 0.09% higher at 0.8821.
The euro has strengthened following the release of the ECB’s December meeting last week. The minutes lifted expectations that policymakers are preparing to unwind the bond buying stimulus program.
Against safe haven currencies, sterling was mixed. GBP/CHF was down 0.29% at 1.3322. GBP/JPY increased 0.32% to 154.40.
GBP/NZD was almost unchanged from the previous session close at 1.9015. GBP/AUD edged up 0.05% to 1.7359.
GBP/CAD jumped 0.35% to 1.7266.
Investors will be watching for the comments from Theresa May and Emmanuel Macron following the meeting on Thursday afternoon. German chancellor Angela Merkel and Macron are also due to meet on Friday.