The GBP/USD currency pair today rallied to new highs buoyed by US dollar weakness due to a decline in US Treasury yields and positive UK credit data. The currency pair was on a donwtrend from the Asian session to the early European session as investors reacted to political uncertainty in the UK.
The GBP/USD currency pair gained 170 points from a low of 1.3980 in the early European session to hit a high of 1.4150 in the early American session.
The pound opened today’s session on a decline given the political environment in the UK as Prime Minister Theresa May came under renewed pressure to resign from her position. The pair rallied higher after the release of the UK money and credit report for December by the Bank of England. The net consumer credit came in at £1.5 billion, which was higher than the expected £1.4 billion. The net lending secured by dwellings was recorded at £3.7 billion, versus the expected £3.3 billion. However, money and credit report for December declined to 61,000 units as compared to the consensus estimate of 63,500 units.
The currency pair’s rally was accelerated further by today’s significant drop in US Treasury yields. The bearish pressure on the greenback was reflected in the US Dollar index, which hit a low of 89.00 earlier today. The greenback was also negatively affected by members of Donald Trump‘s administration differing views on the US dollar.
The currency pair’s short-term performance is likely to be influenced by Mark Carney‘s testimony before the House of Lords and the US consumer confidence index.
The GBP/USD currency pair was trading at 1.4150 as at 13:25 GMT having rallied from a low of 1.3980. The GBP/JPY currency pair was trading at 153.80 having risen from a low of 151.95.
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