The Sterling pound today rallied higher against the much weaker US dollar as traders bought the pound given the Bank of England‘s bullish stance on interest rates. The GBP/USD currency pair rallied for the fourth consecutive session as the bearish sentiment towards the greenback persisted as US Treasury yields continue to fall.
The GBP/USD currency pair today rallied from an opening low of 1.2949 to a high of 1.2996 at the time of writing as the bulls were clearly in control of the pair’s price movements.
The currency pair’s rally was primarily boosted by the weak greenback as tracked by the US Dollar Index, which was on a downtrend from the start of the session. Investors also flocked to the pound after it became evident that the incoming BoE Governor Andrew Bailey was not keen to follow in the footsteps of other central bankers by cutting rates. On the other hand, analysts and investors are expecting a second rate from the Federal Reserve chairman Jerome Powell on 18th March, which could further weaken the dollar.
The global coronavirus outbreak has scared investors who have purchased safe-haven assets led by the US Treasuries, which triggered a significant drop in bond yields and the dollar. The lack of any negative Brexit headlines also boosted the sterling as the EU seems keen to secure a deal with the UK.
The currency pair’s short-term performance is likely to be affected by the US non-farm payrolls set to be released at 13:30 GMT.
The GBP/USD currency pair was trading at 1.2992 as at 09:58 GMT having rallied from a low of 1.1948. The GBP/JPY currency pair was trading at 136.65 having dropped from 137.64.
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