The GBP/USD currency pair rallied higher today after dovish comments from James Bullard, President of the Federal Reserve Bank of St. Louis, during the early North American session. The currency pair was on an upward trend for most of the European session following the release of positive CBI trends total orders earlier today.
The currency pair gained over 80 points at the height of its rally and was on track to close today’s session at levels much higher than the psychological barrier of 1.3000.
James Bullard argued that the creation of jobs in the US was slowing down and that inflation was not at the expected levels, especially since the last Federal Open Market Committee meeting. Therefore, his opinion was that these factors do not allow for the aggressive tightening of monetary policies. His comments triggered a decline in the US Dollar Index to a session low of 97.14.
The markets risk appetite is at a high level, which has triggered a massive sell-off of the US dollar, thus, pushing the GBP/USD currency pair much higher. The market approach towards the greenback is especially cautious in anticipation of James Comey‘s congressional testimony and the release of Donald Trump‘s budget both set for next week.
The currency pair’s future performance is likely to be affected by the UK and US political news on issues such as the Brexit process and Trump’s budget.
The GBP/USD was trading at 1.3019 as at 15:51 GMT having opened the day’s session trading at 1.2949. The GBP/JPY was trading at 145.08 having risen from a daily low of 143.78.
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