Pound Rallies Against Weak Dollar on New £30 Billion Stimulus Plan

The pound today rallied higher against the US dollar, driven by positive investor sentiment and the weakening of the greenback against most of its peers. The GBP/USD currency pair today rallied to new highs as investor risk appetite soared buoyed by the government’s new fiscal stimulus plan.
The GBP/USD currency pair today rallied from a low of 1.2508 at the London open to a high of 1.2623 in the American session and was trading near these highs at the time of writing.
The currency pair traded sideways and fell during the Asian market before rallying higher later. The pound rallied higher today despite the lack of macro releases from the London session amid resurgent Brexit optimism as the UK and EU report progress in negotiations. The pair’s rally accelerated during the American session as UK Chancellor of the Exchequer; Rishi Sunak was scheduled to speak. Sunak outlined a significant fiscal stimulus spending plan that could see Boris Johnson’s government borrow up to £30 billion to support the British economy and prevent job losses.
The greenback’s weakness, as tracked by the US Dollar Index, also contributed significantly to the pair’s rally. The rising coronavirus cases in the US also drove investors away from the dollar, boosting the cable.
The currency pair’s future performance is likely to be affected by tomorrow’s US jobless claims data and geopolitical events.
The GBP/USD currency pair was trading at 1.2611 as at 19:52 GMT, having rallied from a low of 1.2508. The GBP/JPY currency pair was trading at 135.24, having risen from a low of 134.58.
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