The British pound today rallied higher against the US dollar after the release of the UK public sector finances report for November. The pound was lagging against the greenback during the Asian session due to the recovery in US Treasury yields, which slowed down the demand for the pound.
The GBP/USD currency pair rallied by over 35 points from a daily low of 1.3350 to hit a high of 1.3387 on the public finances report, but had retraced most of its gains at the time of writing.
The release of the UK public sector finances report for November by the Office for National Statistics is what triggered the pound’s brief rally. The report indicated that public sector net borrowing (excluding public sector banks) decreased by £3.1 billion to £48.1 billion in the current financial year-to-date (April 2017 to November 2017), compared with the same period in 2016. Public sector net borrowing also decreased by £0.2 billion to £8.7 billion in November 2017, compared with November 2016.
The currency pair suffered a massive decline from yesterday’s peak hit after the EU’s Chief Brexit negotiator, Michel Barnier, indicated support for a Brexit transition period. A report released by the GfK in the Asian session indicating that UK consumer confidence fell to a four-year low in December also weighed heavily on the pound.
The currency pair’s short-term performance is likely to be affected by the release of US 3Q GDP data and jobless claims report scheduled for later today.
The GBP/USD currency pair was trading at 1.3364 as at 12:11 GMT having dropped from an initial high of 1.3387. The GBP/JPY currency pair was trading at 151.72 having rallied from a daily low of 151.25.
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