Pound Rallies to 6-Week Highs on Tory Resignations and Brexit News

The Sterling pound today rallied against the US dollar amid hope that British leaders would pass legislation to prevent a no-deal Brexit. The GBP/USD currency pair’s rally was also boosted by other political developments like Jo Johnson‘s resignation, which lead to an early election.
The GBP/USD currency pair today rallied from a low of 1.2211 to a 6-week high of 1.2353 in the mid-London session and was near these highs at the time of writing.
The currency pair dipped lower in the Asian session before rallying higher in the London session as British lawmakers worked hard to prevent a no-deal Brexit. Investors bought the pair as lawmakers rejected Boris Johnson’s attempt at calling for a general election with the Labour Party abstaining from the vote. The resignation of Jo Johnson as minister and MP was interpreted as a major blow to the Conservative Party and Boris Johnson‘s government. Other Tory MPs have reneged against the party leader and have supported the Benn bill that was passed by the House of Commons yesterday. The House of Lords is set to debate and pass the bill, which will effectively prevent a hard Brexit.
The pair kept up its positive momentum into the American session despite the release of the upbeat US ADP employment change report, which beat consensus estimates by a wide margin.
The currency pair’s short-term performance is likely to be affected by Brexit events and multiple US macro releases scheduled for later today.
The GBP/USD currency pair was trading at 1.2336 as at 12:44 GMT having risen from a low of 1.2211. The GBP/JPY currency pair was trading at 131.87 having risen from a low of 129.93.

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