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Pound Rallies on Upbeat UK Jobless Claims Data, Later Heads Lower

February 23, 2021 at 14:53 by Simon Mugo

A fan of 20-pound billsThe Sterling pound rallied to new 34-month highs against the dollar boosted by the British government’s 4-step reopening plan, which could boost the UK’s economic recovery. The GBP/USD currency pair was also boosted by the drop in the UK unemployment numbers recorded in January. The number of jobless claims fell, indicating that the economy was doing good.

TODAY, the GBP/USD currency pair rallied from a low of 1.4060 to a high of 1.4097 before retracing some of its gains to trade sideways at the time of writing.

The currency pair’s initial rally was fueled by the upbeat UK unemployment data released before the London open. According to the UK’s Office for National Statistics, the country’s claimant count fell by 20,000 people, surprising analysts who expected a 35,000 increase. Britain’s unemployment rate remained stable at 5.1%, while average earnings rose 4.7%. The pair also benefitted from the bullish market sentiment triggered by the British government’s 4-step reopening plan. The British Prime Minister Boris Johnson yesterday outlined a 4-step plan that will ease Coronavirus-related restrictions starting March 8 to the full reopening on June 21.

The cable managed to stave off the greenback’s rise as tracked by the US Dollar Index, which rallied to a high of 90.26, forcing the pair to give up most of its gains. The dollar’s rise was also underpinned by the stable US Treasury yields, which rose as the session progressed.

Jerome Powell’s testimony and US consumer confidence report will likely affect the currency pair’s future performance.

The GBP/USD currency pair was trading at 1.4060 at 14:52 GMT, having fallen from a high of 1.4097. The GBP/JPY currency pair was trading at 147.95 after dropping from a high of 148.40.

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.