The British pound today rallied to new highs against the US dollar despite the release of weak Markit/CIPS UK services PMI data. The cable rallied much higher after the release of disappointing US durable goods orders early in the North American session.
The currency pair rallied by over 100 points from its daily lows to hit a new monthly high of 1.3033 crossing the 1.3000 psychological barrier.
The British pound’s initial rally was largely fueled by the selling bias in the EUR/GBP pair due to the euro’s poor performance. The release of the disappointing Markit/CIPS UK services PMI early in the European session could not deter the currency pair’ steady rise. The services PMI was recorded at 53.2, which was lower than the expected 53.5. The composite PMI figure met expectations by coming in at 54.0.
The US dollar was under slight selling pressure earlier in today’s session due to dovish comments by Lael Brainard, a member of the Board of Governors of the Federal Reserve. However, the release of weak durable goods orders by the Census Bureau accelerated the greenback’s decline. The durable goods orders came in at -6.8% as compared to the expected -2.9% decline. The US Dollar Index hit a new low of 92.18 after the US macro releases.
Given tomorrow’s empty UK docket, the currency pair’s future performance is likely to be affected by the release of the US trade balance data and the ISM services/non-manufacturing composite.
The GBP/USD currency pair was trading at 1.3015 as at 15:52 GMT having rallied from a daily low of 1.2908. The GBP/JPY pair was trading at 141.76 having risen from a low of 141.15.
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