- GBP/USD hits new 32-month-high.
- Sentiments favour the risk bulls.
- US, UK PMIs eyed along with coronavirus updates.
GBP/USD trades near 1.3700 as the markets ignore the services sector’s omission in the recently ratified Brexit deal between the EU and the UK; the pair also sidesteps the record pandemic-numbers and the strict lockdown measures in the UK.
Risk-on bulls continue to cheer the post-Brexit trade deal clearance by the UK Parliament, helping the GBP/USD to maintain its momentum after breaking through the 1.3620-25 resistance area.
Another vital factor assisting the pair is the high chances of additional US fiscal stimulus and the Fed’s continued low-interest regime, pushing the US dollar down to multi-year lows.
Hopes of strong economic growth in 2021 undermine the greenback and assist risk-sensitive currencies. The pro-risk mood was further boosted by the UK approving AstraZeneca/Oxford coronavirus vaccine rollout.
Better-then-expected US weekly jobless claims released on Thursday failed to assist the USD.
The 80 Percent of the UK’s economy is the services sector, so its omission in the Brexit agreement left many observers worried. Nevertheless, the markets focus on the deal’s positives as Brexit related uncertainties were weighing on the GBP for many months. The GBP/USD attracted some dip buying on the first trading day of 2021 and then moved to the highest level since April 2018.
Traders could eye final Manufacturing PMI prints from the UK and the US for the trading action ahead. Pandemic updates would drive the overall risks sentiments, thus crucial for the USD price action, providing trading opportunities in the GBP/USD.
At the time of writing, one British Pound buys 1.3670 US dollars, up 0.10% as of 09:50 AM UTC.
