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Sterling Pound Rallies Against the Dollar, Later Gives Up Its Gains

August 11, 2020 at 17:52 by Simon Mugo

Banknotes of ten British pounds

The Sterling pound today rallied higher against the US dollar in the early London session driven by the upbeat investor risk appetite and the greenback’s weakness. However, the GBP/USD currency pair could not hold on to its gains as the American markets opened and headed lower as investor sentiment shifted in favour of the dollar.

The GBP/USD currency pair today rallied from an Asian session low of 1.3055 to a high of 1.3132 in the mid-London session before giving up most of its gains by the time of writing.

The currency pair rallied higher today driven by positive sentiment and the mixed UK labour market report for July. According to the UK’s Office for National Statistics, the country’s unemployment rate fell to 3.9% versus the consensus estimate of 4.2%. However, the number of jobless claims rose by 94,400 persons, which was much higher than the 10,000 claims predicted by analysts. The pair rallied despite concerns regarding the UK-EU post-Brexit trade talks and the country’s faltering economic recovery

The cable’s decline was fueled by the greenback’s resurgence as tracked by the US Dollar Index, which hit a high of — today. The dollar was supported by the upbeat US producer price index report for July released by the Bureau of Labor Statistics. However, the disappointing US NFIB business optimism index limited its gains.

The currency pair’s future performance is likely to be affected by tomorrow’s multiple UK and US releases.

The GBP/USD currency pair was trading at 1.3088 as at 17:51 GMT, having fallen from a high of 1.3132. The GBP/JPY currency pair was trading at 139.47, having risen from a low of 138.58.

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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