The Sterling pound today rallied higher against the much weaker US dollar after finding support at a critical support level that has held for the past two weeks. The GBP/USD currency pair seemed immune to the rising political tensions between the UK and China regarding the Hong Kong extradition treaty.
The GBP/USD currency pair today rallied from a low of 1.2518 during the Asian session to a high of 1.2661 in the American market and was headed higher at the time of writing.
The Sterling pound rallied higher from the Asian session driven by positive investor sentiment despite simmering tensions between the UK and China. The beef started when the UK accused China of gross human rights violations against the Uighur population on Sunday. Things escalated today after the British Prime Minister Boris Johnson said that the UK would withdraw its extradition treaty with Hong Kong. The pair kept rallying despite a dovish speech from the Bank of England‘s chief economist Andrew Haldane who hinted that low-interest rates could be around for a while.
Most analysts expect the UK’s foreign secretary Dominic Raab is expected to withdraw the treaty later. The cable’s rally was also boosted by the greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 95.73 today. The rising US coronavirus cases were a significant drag on the greenback.
The currency pair’s future performance is likely to be affected by the UK’s public debt report due tomorrow and geopolitical events.
The GBP/USD currency pair was trading at 1.2659 as at 19:31 GMT having, rallied from a low of 1.2518. The GBP/JPY currency pair was trading at 135.86, having risen from a low of 134.34.
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