The Sterling pound today rallied higher against the US dollar driven by market optimism about progress in the development of a vaccine for the coronavirus. The GBP/USD currency pair’s rally did not last as it headed lower in the mid-London session amid market fears of a hard Brexit and a recovery by the US dollar.
The GBP/USD currency pair today rallied from a low of 1.2814 in the Asian session to a high of 1.2926 in the mid-London session before reversing and giving up most of its gains by the time of writing.
The currency pair’s initial rally was fueled by the market’s prevalent risk appetite, which was also reflected in the rally witnessed across most equity markets. Earlier today, the release of the upbeat UK labour market survey for August also contributed to the pair’s rally. According to the UK’s Office for National Statistics, the country’s remained stable at 4.1%, the number of initial jobless claims rose to 73,700. However, average hourly earnings inched higher.Â
Investor fears of a hard Brexit fueled the pair’s demise after the UK Internal Market Bill passed the House of Commons by 340 votes to 26. The bill gives UK Prime Minister Boris Johnson powers to override aspects of the deal made with the EU.Â
The release of the upbeat US import and export price indexes by the Bureau of Labor Statistics also drove the pair lower. The currency pair’s future performance is likely to be affected by tomorrow’s UK inflation data.
The GBP/USD currency pair was trading at 1.2891 as at 17:03 GMT, having risen from a low of 1.2814. The GBP/JPY currency pair was trading at 135.94, having fallen from a low of 136.43.
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