On Tuesday, 17 January, right after Prime Minister May’s speech, the sterling rose by almost 3% against the US dollar and by 2% against the euro, recording its biggest gains against the US dollar since 1993, to above $ 1.24 (Figure 9). 17  Figure 9. GBP-USD Spot Exchange Rate (above) and GBP-USD 3-month ATM Implied Volatility  Source: Bloomberg.
• Against the yen: further appreciation ahead As the market is expecting a notably more restrictive US monetary policy, whereas the Bank of Japan will remain rather expansionary, the outlook for both USD-JPY and EUR-JPY currencies is to appreciate during this year.