Sterling Rallies Despite the UK’s Deteriorating Relations With China

The  Sterling pound today rallied higher against the  much weaker US dollar after finding support at  a  critical support level that has held for  the  past two weeks. The  GBP/USD currency pair seemed immune to  the  rising political tensions between the  UK and  China regarding the  Hong Kong extradition treaty.
The  GBP/USD currency pair today rallied from a  low of  1.2518 during the  Asian session to  a  high of  1.2661 in  the  American market and  was headed higher at  the  time of  writing.
The  Sterling pound rallied higher from the  Asian session driven by  positive investor sentiment despite simmering tensions between the  UK and  China. The  beef started when the  UK accused China of  gross human rights violations against the  Uighur population on  Sunday. Things escalated today after the  British Prime Minister Boris Johnson said that the  UK would withdraw its extradition treaty with Hong Kong. The  pair kept rallying despite a  dovish speech from the  Bank of  England‘s chief economist Andrew Haldane who hinted that low-interest rates could be around for  a  while.
Most analysts expect the  UK’s foreign secretary Dominic Raab is expected to  withdraw the  treaty later. The  cable’s rally was also boosted by  the  greenback’s overall weakness as  tracked by  the  US Dollar Index, which hit a  low of  95.73 today. The  rising US coronavirus cases were a  significant drag on  the  greenback.
The  currency pair’s future performance is likely to  be affected by  the  UK’s public debt report due tomorrow and  geopolitical events.
The GBP/USD currency pair was trading at 1.2659 as at 19:31 GMT having, rallied from a low of 1.2518. The GBP/JPY currency pair was trading at 135.86, having risen from a low of 134.34.
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