The British pound today surged higher against the US dollar boosted by the upbeat UK retail sales data, which beat analysts expectations by a wide margin. The GBP/USD currency pair’s rally was also fueled by investor optimism regarding the post-Brexit trade talks ahead of the rapidly approaching December 31st deadline.
The GBP/USD currency pair today rallied from an opening low of 1.3247 to a high of 1.3292 in the early London session after a major pullback but was trading near its daily highs at the time of writing.
The currency pair inched higher early in today’s session as EU diplomats reported that post-Brexit trade talks were progressing slowly, but three critical issues remained unresolved. The two sides are yet to agree on fisheries, state aid and a level playing field and negotiators are worried about the little time left. European Commission President Ursula von der Lyen told Reuters that Brexit negotiations were making progress despite being halted after a negotiator contracted COVID-19. She was optimistic that a deal could be reached by the end of the year.Â
The release of the UK retail sales report for October by the Office for National Statistics also contributed to the pair’s rally by rising 1.2% versus analysts expectations of a flat reading. The upbeat UK public sector net borrowing figures for October, which came in at £21.58 billion versus the expected £29.5 billion also boosted the cable.
The currency pair’s future performance is likely to be affected by Brexit headlines and US dollar dynamics.
The GBP/USD currency pair was trading at 1.3272 as at 12:37 GMT having rallied from a low of 1.3247. The GBP/JPY currency pair was trading at 137.79, having risen from a low of 137.49.
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