Pound Hits 7-Day High on Santa Claus Rally and USD Weakness

The  Sterling pound today rallied against the  US dollar as  the  Santa Claus rally kicked into full effect in the absence of any significant fundamental releases. The GBP/USD rallied to new 7-day highs as the greenback fell against most of its peers as investor risk appetite soared.
The  GBP/USD currency pair today rallied from an  Asian session low of  1.2968 to  a  high of  1.3075 in  the  early London session and  was trading near this high at  the  time of  writing.
The  currency pair fell at  the  start of  today’s session before reversing course and  heading higher despite the  lack of  any critical macro releases. The  pair’s rally was attributed to  the  Santa Claus rally that has seen most European equity markets such as  the  German DAX, the  Eurostoxx, the  France CAC 40, and  the  UK FTSE all post gains. The upbeat market risk sentiment saw investors bid up currencies that are regarded as being inherently riskier such as the pound — in contrast; they sold most safe-haven currencies such as the US dollar.
The  dollar’s fall, as  tracked by  the  US Dollar Index, which hit a  low of  97.17, also contributed to  the  pair’s rally. The  cable’s performance was further boosted by  the  quiet British political landscape given that the  UK Parliament is in  recess until 2020. Reports that Boris Johnson was keen to  please voters in  Labour Party strongholds also boosted the  pair.
The  currency pair’s future performance is likely to  be affected by  geopolitical events over the  upcoming weekend.
The  GBP/USD currency pair was trading at  1.3072 at  11:46 GMT, having rallied from a  low of  1.2968. The  GBP/JPY currency pair was trading at  109.49 having dropped from a  high of  109.54.

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