The British pound today rallied higher against the US dollar even after the Bank of England Governor Mark Carney took a slightly dovish tone in his speech. The US dollar was largely weaker against its main peers, which also fueled the rally amid lackluster data reported from the US docket.
The currency pair gained about 50 points at the height of its rally as the cable traded in positive territory for the fifth consecutive session.
The cable opened the European session on an upward trend even as Theresa May is expected to form a minority government with the DUP. Mark Carney’s speech in the Early European session drove the pair higher as he assured investors that the BoE was monitoring the UK economy closely. The BoE’s Financial Policy Committee released its Financial Stability Report warning the markets about the risks associated with Brexit negotiations, while urging banks to increase their capital requirements.
The US dollar was under intense selling pressure as the IMF reduced its growth projections for the United States. The US Dollar Index, which tracks the greenback’s performance, almost hit a yearly low given that it was trading in the mid 96.00s. The macro data released from the US docket was mixed as the US Consumer Confidence Index for June released by the Conference Board exceeded expectations. The S&P/Case-Shiller Composite 20 for April was below expectations.
The currency pair’s future performance is likely to be influenced by Janet Yellen‘s Speech in London, which is scheduled for 17:00 GMT.
The GBP/USD pair was trading at 1.2779 as at 15:48 GMT having risen from a low of 1.2714 earlier today. The GBP/JPY was trading at 143.61 having rallied from a low of 141.93.
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