Pound Falls on Bearish Sentiment as UK to Test COVID-19 Vaccine

The Sterling pound today fell against the US dollar as investor sentiment remained decidedly bearish amid news that the UK was developing a COVID-19 vaccine. The GBP/USD currency pair fell despite the release of upbeat UK jobs data as investor risk appetite evaporated pushing the pair lower into negative territory.
The GBP/USD currency pair today fell from an opening high of 1.2442 in the Asian session to a low of 1.2247 in the American session but was slightly off these lows at the time of writing.
The currency pair’s decline was attributed to the risk-off market sentiment as investors reacted to Monday’s oil sell-off that saw crude futures trade in negative territory for the first time. News that North Korea’s leader Kim Jong-Un is ailing also dampened investor sentiment amid uncertainty as to who would be his successor. The release of the latest UK employment data by the Office for National Statistics had a muted impact on the currency pair, which kept falling. UK initial jobless claims increased by 12,100 persons instead of the expected 172,500 individuals. However, the unemployment rate ticked up to 4% versus the consensus estimate of 3.9%.
News that the UK would start testing a new coronavirus vaccine on humans this week provided the pair with some relief but was not enough to trigger a reversal. The stronger greenback as tracked by the US Dollar Index, which hit a high of 100.48 today kept the pair heading lower.
The currency pair’s future performance is likely to be affected by tomorrow’s UK inflation data and geopolitical events.
The GBP/USD currency pair was trading at 1.2296 as at 20:45 GMT having dropped from a high of 1.2442. The GBP/JPY currency pair was trading at 132.51 having fallen from a high of 134.04.

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