Sterling Rallies Against Dollar on Brexit Optimism and UK GDP

The Sterling pound today rallied against the weak dollar ignoring the uncertainty surrounding the Brexit talks as investor sentiment remained decidedly bullish. The GBP/USD currency pair today extended its rally for the third consecutive day driven by the greenback’s overall weakness and positive UK macro reports.
The GBP/USD currency pair today rose from a low of 1.2806 in the early London session to a high of 1.2942 in the American market and was trading near these highs at the time of writing.
The currency pair initially fell as investors reacted to Andrew Bailey‘s comments that the Bank of England had not ruled out negative rates as a policy tool on Tuesday. However, Andy Haldane the BoE’s chief economist played down Bailey’s comments saying that none of the conditions for negative rates had been met. The release of the upbeat UK Q2 GDP report by the Office for National Statistics, which came in at -19.8% versus the expected -20.4% had a minimal impact on the pair. The positive UK Nationwide housing prices survey for September also had a muted effect on the pound.
The cable benefitted immensely from the greenback’s selloff as tracked by the US Dollar Index after President Donald Trump hinted that the election results could be delayed. Hope that a Brexit deal could be reached following the latest round of talks also boosted the pair.
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 1.2912 as at 19:39 GMT having rallied from a low of 1.2806. The GBP/JPY currency pair was trading at 136.12, having risen from a low of 135.18.
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Original from: www.earnforex.com