The GBP/USD currency pair today rallied higher briefly after the release of weak US consumer confidence data during the North American session. The currency pair did not build on the upward momentum established during yesterday’s session after the Bank of England took on a hawkish tone.
The currency pair was trading within a 20 point range for much of today’s session, but rallied higher by an extra 20 points after the data release before retracing most of its gains.
The currency pair’s movements were largely subdued for most of today’s session due to the political uncertainty in the UK. However, recent reports indicated that a deal between the DUP and Theresa May‘s Conservative Party would be reached by early next week.
The release of the University of Michigan consumer sentiment index report triggered a sell-off of the US dollar, which caused the currency pair to rally briefly. The consumer sentiment index dropped to 94.5, which its its lowest level since the election of Donald Trump as the US President. The US Dollar index, which tracks the greenback’s performance also hit a daily low of 97.12 after the release of the report.
Given the empty US and UK dockets on Monday and Tuesday, the future performance of the cable is likely to be affected by the start of Brexit negotiations on Monday, and political events in the US.
The GBP/USD was trading at 1.2779 as at 16:05 GMT having declined from a daily high of 1.2805. The GBP/JPY was trading at 141.65 having dropped from a high of 142.29 earlier today.
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