The Sterling pound today surged against the dollar boosted by the upbeat British inflation report released early in the morning and the positive investor mood. The GBP/USD currency pair’s rally was also fueled by investor hopes that the UK and EU will reach a post-Brexit trade deal before the fast-approaching December 31 deadline.
The GBP/USD currency pair today rallied from a low of 1.3243 in the Japanese session to a high of 1.3280 in the early London session and was headed higher at the time of writing.
The positive investor sentiment drove the pair’s initial rally as many expect the EU and UK to agree on a post-Brexit trade deal as early as next week. However, there is no indication from either side that they are willing to give up some of their demands to secure a deal: both parties are preparing for a no-deal scenario. The release of the upbeat UK consumer price index report for October drove the pair higher. According to the UK’s Office for National Statistics, the country’s CPI remained stable in October as compared to analysts estimates of a 0.1% decline.Â
The upbeat UK producer price index released at the same time as the inflation report also boosted the currency pair. The dollar’s overall weakness as tracked by the US Dollar Index, which fell to a low of 92.21 today also fueled the cable’s rally.
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 1.3289 as at 08:28 GMT having rallied from a low of 1.3243. The GBP/JPY currency pair was trading at 138.12, having risen from a low of 137.82.Â
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