The British pound today extended its gains against the US dollar having opened lower following Saturday’s vote results mandating the government to ask for a Brexit extension. The GBP/USD currency pair recouped all its losses at traded slightly above Friday’s highs as investors waited for John Bercow to rule on the date for a meaningful Brexit vote.
The GBP/USD currency pair today rallied from a daily low of 1.2890 to a high of 1.3013 in the mid-London session before trading sideways as investors waited for new Brexit developments.
The currency pair traded sideways at the start of today’s session as investors pondered the weekend events, including the fact that Boris Johnson was forced to request an extension from the EU. Investors were not sure whether Johnson’s letter was valid, given that it was unsigned. Investors were also concerned after the Northern Irish DUP party announced that it would not support, which puts the deal’s approval at significant risk. However, the pound did not sell off as most analysts believe that the governing Conservative Party can garner the votes needed to pass the recently negotiated Brexit deal even without the DUP’s support.
The greenback’s overall weakness against most of its peers, as tracked by the US Dollar Index also supported the cable’s gains. Steven Mnuchin‘s comments that the US could lift the additional tariffs on Chinese imports scheduled for December briefly boosted the greenback.
The cable’s future performance is likely to be affected by Brexit headlines and tomorrow’s UK public borrowing data.
The GBP/USD currency pair was trading at 1.2966 as at 18:03 GMT having risen from a low of 1.2890. The GBP/JPY currency pair was trading at 140.77 having rallied from a low of 139.80.
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