The GBP/USD currency pair rose to its highest level in almost five months as investors continued to sell off the dollar following the publication of an underwhelming US Consumer Confidence Index on Tuesday.
The pair was up almost immediately during the North American session, rising 0.37% from 1.2882 to 1.293.
The positive turn for GBP/USD is indicative of the recent trend for the pair, which has made gains during each of the last eight sessions.
The US dollar sunk to a two year low on Monday amid concerns about the impact of coronavirus.
There was a modest rally early on Tuesday, but the gains were wiped out by a sudden reversal in Treasury yields.
Longer-term yields were down as investors waited on US policymakers to move closer to an agreement for a financial stimulus package.
“There’s been a big decline in momentum in speculative ideas like gold and some earnings disappointments,” FHN Financial’s Jim Vogel added on Tuesday.
The Consumer Confidence Index also came in lower than expected for July at 92.6 compared to the 94.5 consensus.
The GBP/USD is now moving closer to 1.30, a psychological mark that could be breached if there is genuine buying during the next 24 hours or so.
There was a spike in activity during mid-afternoon BST as traders opted for some technical buying after the 0.0048 rise.
The US dollar looks unlikely to reverse its recent slump for now as analysts speculate whether the Federal Reserve will ratify more monetary easing to support the economy.
Investors were still getting rid of the greenback on Tuesday but selling at higher levels is pushing GBP/USD higher for now.
GBP/USD Exchange Rate
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