A woman holds a flag during a protest against Brexit outside the Eurpean Union Commission headquarters in Brussels, Belgium, October 9, 2019. (Yves Herman/Reuters)

Don’t get too excited about the pound’s reaction to Brexit. It is still much weaker than it was before the 2016 Brexit referendum. pic.twitter.com/rE7bNBtcMq — Michael R. Strain (@MichaelRStrain) December 15, 2019

The British pound surged in response to Boris Johnson’s Conservative Party victory in last week’s U.K. elections. It is currently at its highest level against the dollar since the spring of 2018. It is the world’s best performing major currency.

This reflects investors’ relief over avoiding a Labour Party government and the certainty Mr. Johnson’s victory provides for the fate of Brexit.


But don’t get too excited. The pound is still down quite a bit from where it was before the 2016 Brexit referendum. And Mr. Johnson has some daunting challenges ahead as he takes his country out of the European Union.

Investors — and all of us — will be watching.