Pound Reverses 3-Day Rally Amid Upbeat US Manufacturing Report

The British pound today fell against the US dollar reversing all of Friday’s gains amid a lack of any major releases from the UK docket. The GBP/USD currency pair fell due to the absence of catalysts to prop up the Sterling with the pair’s performance being driven largely by investor sentiment.
The GBP/USD currency pair today fell from a high of 1.2576 in the Asian session to a low of 1.2511 in the American session and was near these lows at the time of writing.
The currency pair opened today’s session trading sideways before commencing a sustained decline in the early European session. The pair’s performance was mostly driven by investor expectations that the Bank of England might join its global peers and turn dovish at their next policy meeting. Investors were also worried that Boris Johnson appears to be the hot favourite to succeed Theresa May as the next Prime Minister. Most political analysts believe that Johnson will win the leadership contest, which ends in a week’s time, and that he will sign a trade deal with the US once he assumes office given his warm relationship with Donald Trump.
The cable fell further following the release of the New York Empire State manufacturing index for July, which came in at 4.3 beating consensus estimates set at 2.0.
The currency pair’s future performance is likely to be affected by tomorrow’s UK jobs report, US retail sales data and Mark Carney’s speech.
The GBP/USD currency pair was trading at 1.2516 as at 15:27 GMT having fallen from a high of 1.2576. The GBP/JPY currency pair was trading at 135.10 having dropped from a high of 135.84.

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