The pound rose to over $1.29 on Thursday, its biggest monthly rise in more than a decade, as the risks of leaving the European Union without a no deal receded and the dollar struggled in the face of weak economic data and a rate-cut. The pound gained 0.4% against the euro as the UK will be remaining in the EU until January 31st with a general election on the 12th of December.

Opinion polls gives the Conservative party a strong lead which is adding to pound stability, but this may prove premature. Polling data will continue to cause swings in sterling between now and the election, with anything but a clear government win adding to the uncertainty.

GBPUSD opened at 1.2939 and reached a high of 1.2972 and dropped back in the afternoon to close at 1.2947

GBPEUR opened at 1.1593 and reached a midday high of 1.1624 before closing lower in the afternoon at 1.1612

The dollar fell to 10-day low against a basket of currencies yesterday as investors considered whether The Federal Reserve would continue to cut rates, and economic data from the eurozone exceeded expectations. The dollar index was down 0.29% for the day.

Investors are generally looking to sell the dollar, deemed as expensive at the moment, in case of a rebound in the global economy next year. Consumer spending in September increased while wages remained unchanged, casting some doubt on whether consumers can continue to drive the economy.

Elsewhere the Japanese yen reach a two-week high as optimism for a US-China trade deal faded. Chinese officials have expressed doubts whether a long-term trade agreement can be reached.

EURUSD opened at 1.1162 and dropped across the day, hitting an afternoon low of 1.1135 before closing higher at 1.1150