The British pound today rallied to new weekly highs against the US dollar following Boris Johnson‘s launch of his campaign to become the next Conservative Party leader. The GBP/USD currency pair later fell as the US dollar recovered and investor sentiment shifted away from the pound amid the leadership uncertainty occasioned by Theresa May‘s impending departure.
The GBP/USD currency pair today rallied to a weekly high of 1.2759 before falling to a low of 1.2685 in the American session and was at these lows at the time of writing.
The currency pair opened today’s session with a bearish bias before rallying higher following yesterday’s massive rally. The lack of any fundamental releases from the UK docket left the pair susceptible to political factors such as Boris Johnson’s launch event. Investors were pleased when the lead candidate said that he would not actively pursue a hard Brexit, but was keen to leave the European Union by October 31. The subdued demand for the US dollar also supported the pair’s brief rally, before its massive drop during the American session.
The pair spiked to its daily highs after the US Bureau of Labor Statistics released the disappointing US consumer price index for May. The annualized CPI print missed expectations by 0.1% triggering the spike. The pair later fell as the US dollar rebounded to trade in the red.
The currency pair’s future performance is likely to be affected by geopolitical events and tomorrow’s US jobless claims data.
The GBP/USD currency pair was trading at 1.2682 as at 16:42 GMT having fallen from a high of 1.2759. The GBP/JPY currency pair was trading at 137.63 having dropped from a high of 138.24.
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British Pound Rallies on Johnson Campaign Launch, Later Retreats
