Pound Rallies Despite Negative UK PMIs and High COVID-19 Cases

The  British pound today rallied higher against the  US dollar despite the  release of  disappointing UK PMI data by  Markit/CIPS as  traders remained bullish on  the  pound. The  GBP/USD currency pair alternated between gains and  losses as  traders fought for  control at  a  critical resistance level ignoring the  fundamentals.
The  GBP/USD currency pair today rallied from a  low of  1.2308 in  the  early London session to  a  high of  1.2415 in  the  American session but was off these highs at  the  time of  writing.
The  currency pair’s rally was primarily driven by  investor sentiment, given that there were no supporting fundamentals behind the  rally. The  release of  the  downbeat Markit/CIPS preliminary UK Manufacturing PMI, which came in at 32.9 versus the expected 42.0 print, coincided with a bullish push by the pair. The negative Markit/CIPS flash UK Services PMI print also had a muted impact on the pair, which was rallying. The pair rallied despite the  high number of  British citizens who are testing positive for  the  coronavirus (at  least 30%), unlike other European countries. Markit also warned that the  UK GDP is contracting by  up to  7% each quarter.
The  cable spiked to  its daily highs as  the  greenback fell to  its daily lows as  tracked by  the  US Dollar Index reflecting the  latter’s role in  today’s rally. The  pair had a  muted reaction to  the  release of  this week’s US initial jobless claims data, which were higher than expected.
The  pair’s future performance is likely to  be affected by  geopolitical events and  tomorrow’s UK retail sales data.
The  GBP/USD currency pair was trading at  1.2338 as  at  17:27 GMT having fallen from a  high of  1.2415. The  GBP/JPY currency pair was trading at  132.67, having dropped from a  high of  133.66.

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