British Pound Falls on Profit-Taking After Massive Rally Last Week

The Sterling pound today fell to fresh lows against the US dollar as investors took profits after last week’s dizzying rally where the pound outperformed all G10 currencies. The GBP/USD currency pair today fell despite the upbeat investor risk appetite that saw global equities rally amid hopes of an economic recovery post-COVID-19.
The GBP/USD currency pair today fell from a high of 1.2666 in the Asian session to a low of 1.2569 in the American market and was headed lower at the time of writing.
The currency pair rallied higher during the Asian session up to its daily high, where it met significant resistance and turned lower. Traders started taking profits at this point fueling the pair’s decline to its daily lows. The lack of macro releases from the British docket meant that the cable was susceptible to geopolitical events. Andrew Bailey, the Bank of England Governor today said that he was very worried about British jobs, which indicates that the government may be expecting high unemployment levels.
The confusion regarding the British government position on wearing face masks in confined public spaces such as shops also dragged the pair lower. However, Boris Johnson, the Prime Minister today, said that he thinks people should wear masks in shops.
The pound’s decline was isolated among the risk-associated assets given that the greenback was very weak as tracked by the US Dollar Index.
The cable’s future performance is likely to be affected by tomorrow’s UK GDP data and US inflation report.
The GBP/USD currency pair was trading at 1.2566 as at 19:07 GMT having dropped from a high of 1.2666. The GBP/JPY currency pair was trading at 134.84 having fallen from a high of 135.48.
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Original from: www.earnforex.com