Pound Falls on Risk-Off Mood, Later Rallies on COVID-19 Vaccine Progress

The Sterling pound today fell against the dollar amid slow trading conditions occasioned by the lack of major releases from the UK and US dockets. The GBP/USD currency pair later recovered most of its losses as the pound rallied with US markets closed for Martin Luther King Jr.’s birthday.
The GBP/USD currency pair rose briefly to a high of 1.3589 in the Asian market before falling to a low of 1.3520 in the early London session then rallying back to levels near its initial high.
The risk-off market sentiment fueled the currency pair’s initial decline as the rising coronavirus cases threaten the global economic recovery. Concerns about the lockdown measures imposed in the UK that are likely to hurt the country’s GDP also weighed n the pair. Uncertainty over whether the British Prime Minister Boris Johnson will extend the Â£20-a-week increase to universal credit that benefits up to 6 million UK families capped the cable’s gains. The Prime Minister and the Chancellor of the Exchequer Rishi Sunak have refused to confirm whether the benefit will be extended once it expires in April.
The cable’s recovery gained momentum later in the session amid optimism about the UK’s coronavirus vaccine rollout progress with the country having administered 4 million vaccines so far. News that the EU would seek an extension to ratify the Brexit deal had a muted impact on the pair.
The currency pair’s future performance is likely to be affected by geopolitical events given tomorrow’s empty UK dockets.
The GBP/USD currency pair was trading at 1.3581 as at 19:03 GMT having risen from a low of 1.3520. The GBP/JPY currency pair was trading at 140.82 having fallen from a high of 141.08.
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Original from: www.earnforex.com