The British pound today rallied slightly against the US dollar following the release of upbeat UK public sector finances report early in the European session. The GBP/USD currency pair was on track to reverse the massive decline that occurred during the last 5 trading sessions where the pair lost over 450 points.
The GBP/USD currency pair today gained over 65 points to rally from a daily low of 1.3917 to trade at a high of 1.3987 at the time of writing.
The pound’s rally was mainly triggered by the release of the provisional UK public sector finances for March by the Office for National Statistics. Public sector net borrowing (excluding public sector banks) decreased by £0.8 billion to £1.3 billion in March 2018, compared with March 2017, which was the lowest March net borrowing since 2004. Public sector net debt (excluding both public sector banks and the Bank of England) was £1,590.1 billion at the end of March 2018, equivalent to 76.3% of GDP, a decrease of £17.9 billion on March 2017.
The currency pair maintained its uptrend into the American session despite the release of positive US consumer confidence index report by the Conference Board. The pound’s steady rise could be attributed to positive investor sentiment towards a favorable outcome in the Brexit negotiations. The pound was able to withstand the consolidating US treasury yields that have boosted the US dollar.
The currency pair’s future performance is likely to be affected by investor sentiment towards both currencies given tomorrow’s empty UK economic docket.
The GBP/USD currency pair was trading at 1.3980 as at 16:51 GMT having risen from a daily low of 1.3917. The GBP/JPY currency pair was trading at 152.11 having rallied from a low of 151.39.
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