- Multiple factors help GBP/USD to move up.
- UK jobs data support the pound.
- Pandemic worries continue to haunt the US dollar.
Brexit-deal hopes and better than expected UK employment details helped the GBP/USD rally to the highest levels in the last two months around 1.3275-80 today.
The deal talks progressed on a positive note as Britain showed the willingness to accommodate a ‘sensible compromise’ regarding fishing and the EU’s chief Brexit negotiator Michel Barnier mentioned redoubling of efforts to reach an agreement – outlining trade relations after the exit of the UK from the EU.
The unexpected drop in the number of UK jobless benefits claims, by 29.8K, in September helped the sterling bulls along with the better than expected increase in wage growth – setting the fastest rate since March. Both numbers offset the rise in the unemployment rate to 4.8 Percent from 4.5 Percent previous.
The global optimism surrounding the corona vaccine updates from pharma companies pushed to reevaluate the chances of a negative interest rate from BOE, strengthening the pound.
The dollar bears partially pulled back the surge in USD from the vaccine news as questions about the immunity provided by the vaccine and the increasing number of pandemic cases in the US cropped up.
The greenback weakness and the vote by the UK House of Lords against the international-law-breaking contents in the UK Internal Market Bill helped the GBP/USD bulls.
The controversial content in the bill proposes to enable the UK government the power to alter the nation’s Brexit agreement with the UK. The rejected bill will not return to the Commons until the end of November – news that triggered hopes of an imminent Brexit-deal.
Traders have preferred to wait for further confirmation before joining the bullish story, and the pair has consolidated during the Asian session today around mid-1.3200s.
The pair will not have much assistance from the UK economic docket today or from the US – on account of Veterans Day bank holiday. The Brexit headlines, along with COVID-19 updates and global market sentiments, will drive the action in GBP/USD in the day ahead.