The British pound today traded sideways against the dollar alternating between losses and gains before rallying higher to post gains amid hopes for further UK stimulus measures. The GBP/USD currency pair today rallied to its daily highs after the Chancellor of the Exchequer unveiled measures to directly support British workers.
The GBP/USD currency pair today fell to a low of 1.2690 in the late Asian session before rallying to a high of 1.2780 in the mid-London market before falling again, then rallying later.
The currency pair initially fell due to the prevailing risk-averse market sentiment, which saw riskier assets such as the pound selloff at the expense of safe-haven assets such as the dollar. UK Finance Minister Rishi Sunak unveiled a new stimulus plan that will see the government support workers with jobs who have endured pay cuts by covering up to two-thirds of their lost wages. Sunak warned that prior stimulus measures were unsustainable. Rumours that the Chancellor has a rift with Prime Minister Boris Johnson were downplayed by number 10 despite the PM skipping Sunak’s jobs announcement.
The cable is on track to maintain the sideways price action against the dollar despite the US Dollar Index rallying to a high of 94.59. Comments by the Bank of England Governor Andrew Bailey that the rapid UK economic recovery would not extend into the winter season dragged the pair lower.
The currency pair’s future performance is likely to be affected by Brexit news and US dollar dynamics.
The GBP/USD currency pair was trading at 1.2754 as at 18:29 GMT having rallied from a low of 1.2690. The GBP/JPY currency pair was trading at 134.44 having risen from a low of 133.62.
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