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British Pound Rallies on Carney Speech, Later Declines on Brexit News

July 5, 2018 at 16:39 by Simon Mugo

A fan of Great Britain 10-pound notesThe British pound today rallied higher against the US dollar in the early European session following hawkish comments by the Bank of England Governor Mark Carney. The pound later erased all its gains in the American session following a news report that the German government was unconvinced with the UK’s latest post-Brexit Customs plan.

The GBP/USD currency pair today rallied to a high of 1.3275 shortly before tumbling to a low of 1.3206 after the Brexit headlines.

The cable’s initial rally was mainly triggered by Mark Carney’s hawkish comments where he stated that the UK economy was evolving as expected and that the BoE should start initiating tighter monetary policies. The pair rallied much higher in the early American session following the release of weak US ADP employment report, which reported 177,000 new jobs versus the expected 190,000 new jobs, weakening the greenback. The pair headed lower after news reports emerged that German Chancellor Angela Merkel was not satisfied with Theresa May‘s post-Brexit Customs plan after a meeting between the two leaders.

The US dollar was later boosted by the release of the US ISM Non-Manufacturing/Services PMI, which came in at 59.1 versus the expected 58.3. The Markit US Services PMI also boosted the US dollar as it met expectations by coming in at 58.3.

The currency pair’s short-term performance is likely to be affected by the release of US FOMC meeting minutes scheduled for 18:00 GMT today.

The GBP/USD currency pair was trading at 1.3220 as at 16:31 GMT having dropped from a daily high of 1.3275. The GBP/JPY currency pair was trading at 146.25 having declined from a high of 146.86.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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