The GBP/USD opened the week on a major rally boosted by positive market sentiment towards the British pound as markets await tomorrow’s ruling by the UK Supreme Court on whether Theresa May needs the approval of parliament to trigger article 50. The strong rally in the currency pair was also triggered by negative sentiment towards the US dollar after Donald Trump assumed office on Friday.
The pound sterling gained about 100 points or one cent as at the time of writing. The US dollar retraced most of the gains it had made against the pound sterling earlier this year.
The British pound received significant support from Theresa May’s speech last week, which allayed fears of a hard Brexit. The pound was also boosted by the impeding Supreme Court ruling, which is predicted will be in favor of May seeking parliamentary approval before triggering article 50.
The US dollar was largely weakened by Trump’s inauguration speech that did not elaborate on the policies he will pursue also his comments on renegotiating trade agreements such as NAFTA and changing trade tariffs have spooked many investors.
The British pound is expected to remain volatile throughout the week if the UK Supreme Court rules that Theresa May has to seek parliament’s approval before triggering article 50 and the reverse is also true.
The GBP/USD currency pair was trading at 1.2483 as at 17:19 GMT having opened trading at 1.2384. The GBP/CAD was trading at 1.6592 having started the day trading at 1.6472. The EUR/GBP was trading at 0.8599 having opened trading at 0.8656.
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