The sterling pound today alternated between losses and gains against the US dollar driven mostly by market sentiment given the empty UK dockets. The GBP/USD currency pair later rallied after the British government confirmed that it was committed to sealing a post-Brexit trade deal with the EU.
The GBP/USD currency pair today fell to a low of 1.2644 before recouping all its losses to trade slightly above its opening price at 1.744 and was near these highs at the time of writing.
The currency pair headed lower earlier today on reports that the British government was planning to trade with the EU on World Trade Organization (WTO) rules. The news triggered the selling given that it came just a few days before Boris Johnson’s hard deadline on the delivery of a skeleton trade agreement. However, a spokesman for the Prime Minister later said that the government was committed to signing a trade deal with the European Union before the December deadline. The news triggered a comeback rally from the pound even as the greenback weakened as tracked by the US Dollar Index, which hit a low of 94.83.
The greenback’s weakness boosted the cable’s recovery as US lawmakers debate a new stimulus program. The rising US coronavirus cases also contributed to the dollar’s overall weakness as investors worry about a second lockdown derailing the US economic recovery.
The currency pair future performance is likely to be affected by tomorrow’s CBI data and geopolitical events.
The GBP/USD currency pair was trading at 1.2738 as at 19:08 GMT, having recovered from a low of 1.2644. The GBP/JPY currency pair was trading at 136.58, having rallied from a low of 135.29.
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