The British pound today rallied higher against the US dollar despite the release of disappointing UK PMI data by Markit/CIPS as traders remained bullish on the pound. The GBP/USD currency pair alternated between gains and losses as traders fought for control at a critical resistance level ignoring the fundamentals.
The GBP/USD currency pair today rallied from a low of 1.2308 in the early London session to a high of 1.2415 in the American session but was off these highs at the time of writing.
The currency pair’s rally was primarily driven by investor sentiment, given that there were no supporting fundamentals behind the rally. The release of the downbeat Markit/CIPS preliminary UK Manufacturing PMI, which came in at 32.9 versus the expected 42.0 print, coincided with a bullish push by the pair. The negative Markit/CIPS flash UK Services PMI print also had a muted impact on the pair, which was rallying. The pair rallied despite the high number of British citizens who are testing positive for the coronavirus (at least 30%), unlike other European countries. Markit also warned that the UK GDP is contracting by up to 7% each quarter.
The cable spiked to its daily highs as the greenback fell to its daily lows as tracked by the US Dollar Index reflecting the latter’s role in today’s rally. The pair had a muted reaction to the release of this week’s US initial jobless claims data, which were higher than expected.
The pair’s future performance is likely to be affected by geopolitical events and tomorrow’s UK retail sales data.
The GBP/USD currency pair was trading at 1.2338 as at 17:27 GMT having fallen from a high of 1.2415. The GBP/JPY currency pair was trading at 132.67, having dropped from a high of 133.66.
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Pound Rallies Despite Negative UK PMIs and High COVID-19 Cases
