Pound Rallies on Hopes That Brexit Will Be Delayed, Later Drops

The British pound today rallied slightly against the US dollar amid investor hopes that the UK government would postpone Brexit to allow time for further negotiations. The pound later fell in the early American session as news headlines indicated that the British Prime Minister Theresa May was keen on leaving the EU within the current deadline.
The GBP/USD currency pair today rallied to a high of 1.3100, but could not break above this crucial level and fell back to new daily lows at 1.3055.
The currency pair rallied higher at the start of today’s session amid news reports that PM May was planning to delay Brexit Day by up to two months to keep negotiations going. However, these headlines were soon surpassed by President Donald Trump‘s tweet stating that he was extending the looming deadline for new tariffs on Chinese goods because of the progress being made in the US-China trade talks. This was a distraction that halted the pair’s rally as investors turned their attention to the US dollar.
The pair later spiked higher just before a speech by Mark Carney the Bank of England Governor, where he announced a partnership with US authorities relating to the trading of derivatives. However, despite several attempts at breaking the 1.3100 level, the cable failed to break above this level, and was stuck in a tight range.
The pair’s future performance is likely to be influenced by Brexit headlines and tomorrow’s BoE testimony before Parliament.
The GBP/USD currency pair was trading at 1.3065 as at 17:21 GMT having dropped from a high of 1.3100. The GBP/JPY currency pair was trading at 145.20 having risen from a low of 144.44.

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