British Pound Rallies Against US Dollar on Mark Carney’s Speech

The British pound today rallied higher against the US dollar after Mark Carney‘s testimony before the UK parliament, which was interpreted by investors as being quite hawkish. The pound was on an uptrend against the US dollar from the early European session despite the lack of any fundamental drivers due to the nearly empty UK economic docket.

The GBP/USD currency pair rallied by over 40 points from a daily low of 1.3376 hit early in the European session to a daily high of 1.3419 after Carney’s speech.

The testimony by the Bank of England Governor, Mark Carney, regarding the Financial Stability Report before the Treasury Select Committee was a major driver behind the pound’s rally. Governor Carney told the Treasury committee that the UK needs an early agreement on the Brexit transition especially in regards to bank supervision. He also warned that there would be consequences for EU banks if the single block does not cooperate with the UK.

The release of the US existing homes sales data for November, which recorded 5.6% growth versus the expected 0.9% increase, boosted the greenback briefly against the pound. The existing home sales report released by the National Association of Realtors came in at 5.81 million versus the market consensus of 5.53 million units.

The currency pair’s near-term performance is likely to be influenced by tomorrow’s release of the UK public finances report and the US 3Q GDP data.

The GBP/USD currency pair was trading at 1.3416 as at 15:55 GMT having rallied from a daily low of 1.3376. The GBP/JPY currency pair was trading at 151.96 having rallied from a low of 151.16.

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