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Pound Rallies on Brexit Deal Vote, COVID-19 Vaccine and New Lockdown

December 30, 2020 at 19:05 by Simon Mugo
A column of 20 Great Britain pound notes

The Sterling pound today rallied higher against the dollar boosted by the UK Parliament’s vote to implement the post-Brexit trade deal agreed with the EU. The GBP/USD currency pair’s gains were limited by the rising coronavirus cases driven by the virus’s more virulent strain and new lockdown measures.

Today, the GBP/USD currency pair rallied from an opening low of 1.3493 in the Australian market to a high of 1.3615 in the mid-London session before trading sideways for the rest of the session.

The currency pair’s initial rally was driven by the generally weak dollar as tracked by the US Dollar Index, which hit a low of 89.55. News that UK regulators had approved the AstraZeneca/Oxford vaccine also provided a greater impetus to the pair. The release of the upbeat UK Nationwide house prices index for December also boosted the pair. Investors cheered when the UK House of Commons voted on favor of the post-Brexit trade agreement with EU. However, concerns remain over the exclusion of Britain’s crucial services sector from the deal. Prime Minister BorisJohnson’s speech announcing the new coronavirus lockdown measures as the new strain of COVID-19 continues to spread capped the pair’s gains.

The dollar’s weakness driven by investor expectations that the US Senate will approve the $2,000 stimulus checks also fueled the cable’s rally. Investor sentiment towards the pound remained decidedly bullish.

The currency pair’s future performance is likely to be affected by geopolitical events on the year’s last trading day.

The GBP/USD currency pair was trading at 1.3616 as at 19:04 GMT having rallied from a low of 1.3493. The GBP/JPY currency pair was trading at 140.56 having risen from a low of 139.71.

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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