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Pound Rallies on Brexit Deal Hopes and Upbeat UK Retail Sales

September 18, 2020 at 11:03 by Simon Mugo

10 pound notes on the background made of 20 pound notes

The Sterling pound today fell then rallied against the US dollar to trade at breakeven amid investor optimism that the EU and UK could sign a post-Brexit deal soon. The GBP/USD currency pair today attempted to extend its 4-day rally boosted by the upbeat UK retail sales data and the positive investor sentiment that favoured risk assets.

The GBP/USD currency pair today fell to a low of 1.2941 in the early Asian market before reversing course and rallying to a high of 1.2999 in the initial London session.

The currency’s pair’s rally from yesterday was boosted by the European Commission President Ursula Vond Der Lyen’s comments that she believes a trade deal between the EU and the UK is possible. The pair’s rally was hampered by news that the British Prime Minister Boris Johnson‘s government was considering another national lockdown to curb rising coronavirus cases. The release of the upbeat UK retail sales report for August by the Office for National Statistics also contributed to the pound’s rally. British headline retail sales came in at 0.8%, while core retail sales were 0.6%; both prints beat expectations.

The greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 92.78 today also drove the pair higher. However, the cable was unable to break above the crucial 1.30 resistance level, which could see it post further gains.

The cable’s future performance is likely to be affected by Brexit news and the UoM US consumer sentiment survey.

The GBP/USD currency pair was trading at 1.2980 as at 11:02 GMT, having risen from a low of 1.2941. The GBP/JPY currency pair was trading at 135.43, having fallen from a high of 136.16.

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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