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Pound Rallies on Positive Sentiment and Post-Brexit Trade Deal Hopes

June 22, 2020 at 18:19 by Simon Mugo

50 pound notes and some coins on the UK flag

The Sterling pound today rallied higher against the US dollar driven by positive investor sentiment about EU-UK relations post-Brexit due to recent events. The GBP/USD currency pair today was up as amid resurgent investor risk appetite, in which investors buy riskier currencies.

The GBP/USD currency pair today rallied from an opening low of 1.2336 in the Australian session to a high of 1.2470 in the American session and was near these highs at the time of writing.

The currency pair traded with a positive bias from the start of today’s session as traders bid up the pound and sold the dollar. The market was reacting to signs of progress in Brexit talks after French president Emmanuel Macron visited London last week. The post-Brexit optimism was also linked to the meeting between the Ursula von Der Lyen, the European Commission President, and Boris Johnson on June 11, where the two made progress on critical issues. However, the release of the UK industrial trends survey for June by the Confederation of British Industry derailed the pair slightly as the decline was more than expected.

Investor optimism was also boosted by the continuing gradual reopening of the British economy as pubs set to open. The greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 97.01 today, also boosted the pair. The weak US existing home sales data also favoured the pound.

The currency pair’s future performance is likely to be affected by tomorrow’s Markit PMI data and geopolitical events.

The GBP/USD currency pair was trading at 1.2467 as at 18:18 GMT, having rallied from a low of 1.2336. The GBP/JPY currency pair was trading at 133.29, having risen from a low of 131.75.

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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