Pound Rallies on USD Weakness, Falls on Boris Johnson’s Remarks

The British pound today rallied to its daily highs early in the session driven largely by US dollar weakness as investors expect the Fed to announce its rate cut plans. However, the GBP/USD currency pair quickly dropped following comments by Boris Johnson regarding the October 31st Brexit deadline.
The GBP/USD currency pair today rallied to a daily high of 1.2784 before dropping to a low of 1.2710 in the American session and trading near these lows at the time of writing.
The currency pair traded in a consolidative range for most of the Asian session before breaking out and rallying to its daily highs in the European session. The rally was mostly driven by positive investor sentiment and the weak greenback but was short-lived. The pair soon fell and headed lower following Boris Johnson‘s reassertion that he would take the UK out of the European Union by October 31st. He also added that he does not support the current Brexit deal claiming that the EU could not impose duties on UK car exports, which reignited investor fears of a hard Brexit.
The cable kept falling into the American session despite the release of weak US consumer confidence index by the Conference Board. The pair also had a muted reaction to the release of the upbeat US house price index for April by the Federal Housing Finance Agency.
The pair’s short-term performance is likely to be affected by Fed Chair Jerome Powell‘s speech scheduled for 17:00 GMT.
The GBP/USD currency pair was trading at 1.2721 as at 15:49 GMT having fallen from a high of 1.2784. The GBP/JPY currency pair was trading at 136.04 having dropped from a high of 136.84.

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