Sterling Rallies Against Dollar on Brexit Optimism and UK GDP

The  Sterling pound today rallied against the  weak dollar ignoring the  uncertainty surrounding the  Brexit talks as  investor sentiment remained decidedly bullish. The  GBP/USD currency pair today extended its rally for  the  third consecutive day driven by  the  greenback’s overall weakness and  positive UK macro reports.
The  GBP/USD currency pair today rose from a  low of  1.2806 in  the  early London session to  a  high of  1.2942 in  the  American market and  was trading near these highs at  the  time of  writing.
The  currency pair initially fell as  investors reacted to  Andrew Bailey‘s comments that the  Bank of  England had not ruled out negative rates as  a  policy tool on  Tuesday. However, Andy Haldane the  BoE’s chief economist played down Bailey’s comments saying that none of  the  conditions for  negative rates had been met. The  release of  the  upbeat UK Q2 GDP report by  the  Office for  National Statistics, which came in  at  -19.8% versus the  expected -20.4% had a  minimal impact on  the  pair. The  positive UK Nationwide housing prices survey for  September also had a  muted effect on  the  pound.
The  cable benefitted immensely from the  greenback’s selloff as  tracked by  the  US Dollar Index after President Donald Trump hinted that the  election results could be delayed. Hope that a  Brexit deal could be reached following the  latest round of  talks also boosted the  pair.
The  currency pair’s future performance is likely to  be affected by  Brexit news and  US dollar dynamics.
The  GBP/USD currency pair was trading at  1.2912 as  at  19:39 GMT having rallied from a  low of  1.2806. The  GBP/JPY currency pair was trading at  136.12, having risen from a  low of  135.18.
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