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Pound Rallies to New Weekly Highs on Brexit Rumors and BoE Rate Decision

November 1, 2018 at 15:13 by Simon Mugo

Banknotes of ten British poundsThe British pound today rallied to new highs against the US dollar following Brexit rumors that the British PM Theresa May had signed a deal with the EU on the financial services sector. The pound was further boosted by the Bank of England‘s monetary policy decision, which helped it rally against the greenback despite mixed US macro releases.

The GBP/USD currency pair today rallied from an opening low of 1.2764 to a high of 1.2954 backed by the mostly positive UK fundamentals.

The cable opened today’s session with a massive rally as investors priced-in yesterday’s comments by the UK Brexit Minister Dominic Raab‘s advocating for a final Brexit deal by November 21st. The pair’s rally extended into the early European session despite the UK nationwide house price index missing expectations by recording zero growth as opposed to the expected 0.2% expansion. The pair then retreated slightly before rallying higher after the Bank of England announced its monetary policy decision. The BoE left its bank rate at 0.75% and its asset purchase target at £435 billion, which was expected. The bank also released its November inflation report, which had no surprises.

The BoE Governor Mark Carney‘s cautiously optimistic speech also boosted the pound. Several US macro releases such as the weekly jobless claims data, and the ISM Manufacturing and Employment PMI’s had a muted impact on the currency pair.

The currency pair’s future performance is likely to be affected by Brexit headlines and tomorrow’s US non-farm payrolls data.

The GBP/USD currency pair was trading at 1.2944 as at 15:02 GMT having rallied from a low of 1.2764. The GBP/JPY currency pair was trading at 145.84 having risen from a low of 144.01.

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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