The GBP/USD currency pair rallied higher during the European session today as markets expected parliament to vote in favor of triggering article 50 later today. The British pound gained significantly against the US dollar despite the greenback being on a recovery path against other major currencies today.
The currency pair had gained over 50 pips since the start of the day’s trading and was performing well even during the North American session. The US dollar index had also risen from the lows below 99.40 that it registered yesterday to hit 100.00 today.
The Markit/CIPS UK Manufacturing PMI released today indicated that the UK’s manufacturing sector had a strong start to the year despite the PMI being recorded at 55.9, which is lower than December’s 56.1. National Institute for Economic and Social Research also reported today that it expects the UK economy to grow by 1.7%, which is higher than the NIESR’s initial estimate of 1.0% after the Brexit vote last year.
The currency pair was also affected by the US ISM Manufacturing PMI, which was reported at 56, higher than the expected figure of 55. January’s ADP report was also higher than expected.
The currency pair will be affected significantly by the results of the FOMC meeting to be released by Fed chair, Janet Yellen later today, and also by the UK Parliament’s vote on Article 50.
The GBP/USD was trading at 1.2642 as at 16:17 GMT having opened the day’s trading at 1.2581. The GBP/JPY was trading at 143.53 having started the day’s session at 141.87.
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