Markets take bets on what Donald Trump will change

Sterling gained ground against the dollar and the euro, as markets continued to sift through the potential implications of Donald Trump’s surprise victory in the US presidential election.

The uncertainty generated by Mr Trump’s win after a campaign that included a wide range of potentially disruptive policy pledges — from building a wall with Mexico to declaring China a currency manipulator — threatens to provide a different set of impulses for the UK currency over the next few months.

A number of banks have now said they expect the dollar to strengthen next year on the back of higher US yields and inflation, which would put more pressure on the pound’s dollar value as London starts formal talks on an exit from the EU.