Global financial markets have been greatly influenced by politics in recent weeks, and nowhere was this clearer than in currency movements this week.

The British pound had its best day against the United States dollar since 1998, after Prime Minister Theresa May gave a speech on Tuesday outlining Brexit plans.

Meanwhile, the greenback recovered some ground yesterday after having plunged on Tuesday following a comment by President-elect Donald Trump that the currency was too strong.

United Overseas Bank economist Lee Sue Ann said in a research note yesterday that sterling's surge suggested that any concerns about the content of Mrs May's speech, where she said Britain will leave the European Union single market, had been outweighed by relief that it was delivered at all.

"Yesterday, she made her most comprehensive statement to date on the relationship she thinks Britain should have with the rest of the EU after Brexit. This does end months of uncertainty and confusion on some matters."

Indeed, the pound has swung wildly each time the British government divulges new information on how it plans to handle its departure from the EU. After Mrs May's speech, sterling surged 3.1 per cent against the US dollar before retreating slightly to US$1.2325 yesterday evening.

The pound had weakened almost 4 per cent against the Singapore dollar since last Thursday, but rallied 1.5 per cent yesterday to $1.7515.

Phillip Futures analyst Woon Tian Yong said there will likely be more swings ahead: "Despite Mrs May's clear indication of a cooperative stance with regional and global trading partners, there still remains much uncertainty with regard to how the final Brexit deal will materialise. She will have to navigate her way around European leaders who have repeatedly and fiercely defended the exclusivity of the benefits associated with being in the EU."

It was a contrasting week for the greenback. The US currency has been surging since Mr Trump's election victory, amid expectations that he will introduce big-spending, tax-cutting policies that will spur corporate America.

However, it did an about-turn on Tuesday, declining sharply against a basket of major currencies, when Mr Trump said it was too strong.

The US dollar retreated about 0.7 per cent against the Singdollar on Tuesday before rebounding to $1.4306 yesterday evening.

The greenback's weakening was, however, a boost to emerging Asian currencies, which have largely suffered in recent months as investors have been favouring the US dollar.

Yesterday the Malaysian ringgit advanced 0.4 per cent against the US dollar, while the Thai baht strengthened to a two-month high.

•Additional reporting by Jacqueline Woo