GBP/USD Continues Higher After Tuesday’s Rally
On Wednesday, GBP/USD continues to trade somewhat bullish after rising by more than 1.5% in the previous session, despite the market focus remaining on the escalating coronavirus crisis. At the time of writing, GBP/USD is trading at around 1.184.
In recent weeks, GBP/USD experienced severe selling with investors dumping the pound and other currencies and switching towards the US dollar over heightened worries about the severe economic fallout from the pandemic. Traders also remained skeptical about the British government’s and BOE’s efforts for stimulus offering adequate support to the economy, unlike the several measures already unveiled by the Fed.
While the rally in GBP/USD was driven by a broad-based weakness in the US dollar over the past few sessions, analysts anticipate the GBP to continue being bearish for some time to come. As Britain continues to struggle with rising number of coronavirus cases, traders focused on Britain’s large current account deficit as a concern keeping them away from buying GBP.
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