The Sterling pound today rallied against the US dollar as the Santa Claus rally kicked into full effect in the absence of any significant fundamental releases. The GBP/USD rallied to new 7-day highs as the greenback fell against most of its peers as investor risk appetite soared.
The GBP/USD currency pair today rallied from an Asian session low of 1.2968 to a high of 1.3075 in the early London session and was trading near this high at the time of writing.
The currency pair fell at the start of today’s session before reversing course and heading higher despite the lack of any critical macro releases. The pair’s rally was attributed to the Santa Claus rally that has seen most European equity markets such as the German DAX, the Eurostoxx, the France CAC 40, and the UK FTSE all post gains. The upbeat market risk sentiment saw investors bid up currencies that are regarded as being inherently riskier such as the pound â in contrast; they sold most safe-haven currencies such as the US dollar.
The dollar’s fall, as tracked by the US Dollar Index, which hit a low of 97.17, also contributed to the pair’s rally. The cable’s performance was further boosted by the quiet British political landscape given that the UK Parliament is in recess until 2020. Reports that Boris Johnson was keen to please voters in Labour Party strongholds also boosted the pair.
The currency pair’s future performance is likely to be affected by geopolitical events over the upcoming weekend.
The GBP/USD currency pair was trading at 1.3072 at 11:46 GMT, having rallied from a low of 1.2968. The GBP/JPY currency pair was trading at 109.49 having dropped from a high of 109.54.
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Pound Hits 7-Day High on Santa Claus Rally and USD Weakness
