Pound Rallies on Upbeat UK GDP and Positive Brexit Events

The Sterling pound today rallied to new 6-week highs following the release of upbeat monthly UK GDP estimate in the early London session. The GBP/USD currency pair recovered from Friday’s pullback amid renewed investor optimism that a hard Brexit could be avoided.
The GBP/USD currency pair today rallied from a low of 1.2234 in the early London session to a high of 1.2383 after the upbeat releases before retracing some of its gains.
The currency pair opened today’s session trading with a bearish bias in the Asian session before reversing course as the European session opened. The pair rallied higher following the release of the upbeat UK GDP data for July by the Office for National Statistics. The GDP print surprised by coming in at 0.3% versus the expected 0.1% print. The release of the upbeat UK industrial production data, which expanded by 0.1% beating consensus estimates of a 0.1% contraction also boosted the pair. The upbeat manufacturing production data combined with the positive goods trade balance data for July also released at the same time contributed to the pair’s rally.
The cable’s performance was boosted by the royal assent of the Benn bill, which prohibits a no-deal Brexit. The pair’s performance was further boosted by Boris Johnson’s comments that his government had plenty of options to replace the thorny Irish backstop plan. The pair retraced some of its gains after House of Commons Speaker John Bercow announced that he would resign.
The pair’s future performance is likely to be heavily influenced by Brexit developments as Parliament adjourns.
The GBP/USD currency pair was trading at 1.2363 as at 16:41 GMT having risen from a low of 1.2234. The GBP/JPY currency pair was trading at 132.29 having rallied from a low of 130.81.

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