Pound Rallies on Upbeat UK Manufacturing PMI and COVID-19 Success
The Sterling pound rallied against the dollar buoyed by the UK’s COVID-19 vaccination programme’s success that has seen infection and death rates decline. The GBP/USD currency pair’s rally was also fueled by the upbeat British manufacturing data released earlier today, showing the UK’s economic recovery.
The GBP/USD currency pair rallied from a low of 1.3746 in the early London market to a high of 1.3836 in the American session and was trading near these highs at the time of writing.
The currency pair’s initial decline was driven by negative investor sentiment as the dollar edged higher. However, the pair reversed course and headed higher during the early London session amid some dip-buying as US coronavirus cases surge. The final Markit/CIPS UK Manufacturing PMI release saw the figure upgraded to 58.9 versus analysts estimates set at 57.9 also boosted the pair. Expectations that the UK will not announce new lockdown measures also lifted the pound as other countries announce new restrictions to tame rising coronavirus cases.
The dollar’s overall weakness, as tracked by the US Dollar Index, also supported the cable’s rally. Falling US 10-year Treasury yields also made the pound more attractive.
The release of the disappointing US initial jobless claims report also favored the cable. The upbeat ISM US Manufacturing PMI, which came in at 64.7, beating analysts’ estimates of 61.3, had a muted impact on the pair.
The currency pair’s future performance is likely to be affected by geopolitical events given that UK and US markets will be closed for Good Friday tomorrow.
The GBP/USD currency pair was trading at 1.3827 at 18:13 GMT, having rallied from a low of 1.3746. The GBP/JPY currency pair was trading at 152.96 after rising from a low of 152.29.
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Original from: www.earnforex.com
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