British Pound Rallies on Rumors That Brexit Would Be Delayed

The  British pound today rallied higher against the  US dollar in  the  European session on rumors that Brexit would be delayed. The  GBP/USD had posted small gains after the  release of  mixed UK data where the  GDP beat expectations, while manufacturing data missed estimates.
The  GBP/USD currency pair today rallied from a  low of  1.2709 to  a  high of  1.2851 following the  Brexit delay rumors.
The  currency pair earlier today traded with a  bearish trend in  the  Asian session ahead of  the  UK macro releases. The  release of  the  UK manufacturing production data for  November triggered a  brief decline by  the  pair as  the  print missed expectations. According to  the  Office for  National Statistics, manufacturing output contracted by  0.3% in  November versus the  expected 0.3% growth, while the  annualized print fell by  1.1% as  compared to  the  consensus estimate of  a  0.7% decline. Industrial production also contracted by  0.4% versus the  expected 0.2% expansion. The  trade deficit with the  EU was higher than expected by  coming in  at   £3.920 billion, while the  total trade balance figure was recorded at – £2.904 billion.
The  cable rallied slightly boosted by  the  GDP estimate for  November, which came in  at  0.2% beating expectations by  0.1%. However, the  pair shot higher after the  rumors of  the  government delaying Article 50 were published. The  pair had a  muted reaction to  the  US CPI data for  December released by  the  Bureau of  Labor Statistics.
The  currency pair’s performance over the  weekend is likely to  be influenced by  geopolitical events.
The  GBP/USD currency pair was trading at  1.2795 as  at  14:27 GMT having rallied from a  low of  1.2709. The  GBP/JPY currency pair was trading at  138.93 having risen from a  low of  137.64.

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