Pound Rallies Despite Brexit Headlines, Falls on Powell’s Testimony

The Sterling pound today rallied higher against the US dollar extending a 3-day winning streak by riding on yesterday’s momentum created by the positive UK GDP figures. The GBP/USD currency pair later fell during the American session as the Fed Chair Jerome Powell testified before the Senate housing committee where he reiterated his hawkish stance.
The GBP/USD currency pair today traded in a 40-pip range marked by a low of 1.2951 and a high of 1.2991 and was trading within this range at the time of writing.
The currency pair opened today’s session trading with a slightly bullish bias but got stuck within a tight trading range during the Asian session. The currency pair rallied higher in the early London session driven largely by bullish investor sentiment following yesterday’s upbeat UK GDP report. The lack of any major UK macro releases today meant that the pound’s performance was heavily influenced by Brexit headlines as the EU and UK stick to their tough positions. Investor worried about the UK crashing out of the EU without a deal capped the pound’s gains allowing the dollar to push the pair lower.
The pair fell in the early American session as Jerome Powell testified that the US economy was strong but that the coronavirus could have a negative impact on the country. The greenback’s rally as tracked by the US Dollar Index, which hit a high of 98.97 also contributed to the pair’s decline.
The currency pair’s future performance is likely to be affected by Brexit headlines and tomorrow’s US inflation report.
The GBP/USD currency pair was trading at 1.2965 as at 18:00 GMT having fallen from a high of 1.12991. The GBP/JPY currency pair was trading at 142.67, having risen from a low of 142.22.

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