The Sterling pound today rallied higher against the US dollar despite the current lockdown in the UK amid rising coronavirus cases as opposed to other European countries. The GBP/USD currency pair today rallied higher as the dollar retreated driven by the risk-on market sentiment as Boris Johnson prepares to host a cabinet meeting today.
The GBP/USD currency pair today rallied from an opening low of 1.2428 in the Asian session to a high of 1.2517 in the mid-London session and was headed higher at the time of writing.
The pair’s rally was mostly driven by investor sentiment given the lack of macro releases from the UK docket. Some analysts attributed the rally to the fact that Boris Johnson is back at the helm of the British government despite the deepening COVID-19 crisis. Investors were undeterred by the news that the UK’s lockdown measures could extend into June as compared to other European countries that are reopening their economies. News that Gilead Sciences remdesivir drug was showing positive results in treating COVID-19 patients also boosted investor risk appetite lifting riskier assets such as the pound.
The greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 99.39 today also contributed to the cable’s rally. The DXY has been on a downtrend for the past five sessions despite the Federal Reserve’s promise to support the US economy.
The currency pair’s short-term performance is likely to be affected by the US personal consumption data and Johnson’s speech later today.
The GBP/USD currency pair was trading at 1.2526 as at 11:44 GMT having rallied from a low of 1.2428. The GBP/JPY currency pair was trading at 133.44, having risen from a low of 132.67.
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