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London - The pound extended last week’s advance against the dollar as SoftBank Group agreed to buy Britain’s ARM Holdings for £24.3bn in the Japanese company’s biggest deal ever.
The British currency also climbed versus the euro after Bank of England policy maker Martin Weale said "firmer evidence" was needed on the impact of the UK leaving the European Union before the Bank of England considers additional stimulus.
The pound surged last week after the BOE left policy unchanged, surprising markets, where futures contracts had priced in a rate cut.
The currency was also supported by the appointment of Theresa May as UK’s Prime Minister, which eased some of the post-Brexit market stress.
Sterling was the best performer among its Group-of-10 peers on Monday.
"It’s a $32bn purchase - market participants tend to front-run M&A movements," said Marshall Gittler, head of investment research at FXPRIMUS Europe in Limassol, Cyprus.
"This is a huge amount of money that is obviously going to flow into the UK."
The pound climbed 0.6% to $1.3267 as of 10:21 a.m. London time, adding to a 1.8% gain in the five days ending July 15, its best week since March. Sterling appreciated 0.4% to 83.30 pence per euro.
Softbank is offering 1 700 pence in cash per ARM share, or a 43% premium to Friday’s closing price, according to a statement on Monday.
