Pound Rallies on Brexit Extension Hopes Ahead of Crunch Meeting

The  Sterling pound today launched a  major rally against the  US dollar on  news that Boris Johnson was thinking of extending the Brexit talks deadline past tomorrow. The GBP/USD currency pair had initially sunk to new weekly lows before the announcement triggered a shift in investor sentiment to  very bullish fueling the  rally.
The  GBP/USD currency pair today fell to  a  low of  1.2863 in  the  early London market before rallying to  a  high of  1.3064 during the  American session and  was trading near these highs at  the  time of  writing.
The  currency pair’s initial decline was triggered by  news reports that European Union leaders were set to  label the  ongoing Brexit talks as  inconclusive at  their summit, which starts tomorrow. However, a  news report citing an  official close to  the  Brexit negotiations saying that the  British Prime Minister would seek to  extend negotiations beyond his October 15 deadline. The  news came ahead of  a  video conference between Boris Johnson and  Ursula von der Lyen the  European Commission President later tonight, which many hope will yield a  breakthrough.
The  cable’s rally was further fueled by  the  greenback’s overall weakness as  tracked by  the  US Dollar Index, which hit a  low of  93.25 today. Investors ignored the  release of  the  US producer price index report for  September by  the  Bureau of  labor Statistics, which beat expectations by  coming in  at  0.4% versus the  expected 0.2%.
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 1.3018 as at 16:55 GMT having rallied from a low of 1.2863. The GBP/JPY currency pair was trading at 136.87, having risen from a low of 135.67.
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