LONDON (Reuters) - Sterling surged above $1.38 for the first time since the results of Britain's vote to leave the European Union on Monday, as the dollar weakened broadly and on hopes that other EU members would seek a relatively "soft" Brexit.
The pound posted its biggest jump in four months against the dollar on Friday, on a media report that the Netherlands and Spain were open to a deal for Britain to remain as close as possible to the trading bloc crushed short positions. Officials from those countries later denied the report. But market-watchers say the dialogue around Britain's exit from the bloc has in general turned more positive for Britain. "Up to now the remaining EU countries have presented a fairly uniform front of trying to make things as hard as possible for Britain," said ACLS Global chief strategist Marshall Gittler. "If it turns out that they do try to negotiate a 'win-win' solution for Britain, it could help the pound a lot," he said, highlighting a report by Bloomberg that Luxembourg's prime minister had called for "pragmatism" and wanted "to limit the negative impact for both sides".Some analysts said German Chancellor Angela Merkel's breakthrough last week in talks to form a grand coalition in government had helped the pound, as Merkel is seen by markets as an ally of Britain's and someone who would pursue a mutually beneficial trade deal. Sterling traded as high as $1.3819