Pound Rallies on Brexit Extension Hopes Ahead of Crunch Meeting

The Sterling pound today launched a major rally against the US dollar on news that Boris Johnson was thinking of extending the Brexit talks deadline past tomorrow. The GBP/USD currency pair had initially sunk to new weekly lows before the announcement triggered a shift in investor sentiment to very bullish fueling the rally.
The GBP/USD currency pair today fell to a low of 1.2863 in the early London market before rallying to a high of 1.3064 during the American session and was trading near these highs at the time of writing.
The currency pair’s initial decline was triggered by news reports that European Union leaders were set to label the ongoing Brexit talks as inconclusive at their summit, which starts tomorrow. However, a news report citing an official close to the Brexit negotiations saying that the British Prime Minister would seek to extend negotiations beyond his October 15 deadline. The news came ahead of a video conference between Boris Johnson and Ursula von der Lyen the European Commission President later tonight, which many hope will yield a breakthrough.
The cable’s rally was further fueled by the greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 93.25 today. Investors ignored the release of the US producer price index report for September by the Bureau of labor Statistics, which beat expectations by coming in at 0.4% versus the expected 0.2%.
The currency pair’s future performance is likely to be affected by Brexit news and US dollar dynamics.
The GBP/USD currency pair was trading at 1.3018 as at 16:55 GMT having rallied from a low of 1.2863. The GBP/JPY currency pair was trading at 136.87, having risen from a low of 135.67.
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Original from: www.earnforex.com