Pound Rallies to 12-Week Highs on AstraZeneca Vaccine, UK PMIs

The sterling pound today surged to 12-week highs against the dollar boosted by news of AstraZeneca’s COVID-19 vaccine given that its a British/Swedish company. The GBP/USD currency pair later trimmed its gains after the dollar surged to new multi-month highs on upbeat US Flash PMIs released by Markit Economics.
The GBP/USD currency pair today rallied to a high of 1.3397 in the mid-London session before falling to a low of 1.3264 in the American market but had since recouped some of its losses.
The currency pair’s initial rally was driven by news that AstraZeneca’s vaccine was 90% effective against the coronavirus. Investors cheered the news because the company will be selling its vaccine at cost, which makes it cheaper than other vaccines. The release of the upbeat Markit/CIPS flash Manufacturing PMI, which came in at 55.2 versus the expected 50.5 print also boosted the pair as did the upbeat UK services PMI. Hawkish testimonies by Bank of England policymakers led by Andrew Bailey the Governor also fueled the pair’s rally. Andy Haldane, the BOE’s chief economist, said that there was evidence that vaccine news had boosted financial markets confidence.
The cable took a hit after the release of the upbeat Markit flash US Manufacturing & Services PMIs, which both beat analysts expectations. The positive PMIs fueled the dollar’s resurgence as tracked by the US Dollar Index, which hit a high of 92.80 today.
The currency pair’s future performance is likely to be affected by Brexit headlines and US dollar dynamics.
The GBP/USD currency pair was trading at 1.3313 as at 18:26 GMT having fallen from a high of 1.3397. The GBP/JPY currency pair was trading at 138.91 having rallied from a low of 138.07.
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Original from: www.earnforex.com