The GBPUSD pair has been moving higher over the last 24 hours as the weakness in the dollar spreads across the board and helps the other currencies to gain against the dollar. This is expected to continue in the short term as we head into the new year and another long weekend and the liquidity is expected to dry up even further.
GBPUSD Also Higher
There has not been much fundamental or economic events over the last 24 hours and this is only expected at this time of the year when the world comes to a standstill on account of the holidays around Christmas and New Year as well. But that does not seem to have deterred the dollar bears in any manner as they used the reopening of the markets in Europe yesterday as a pretext to sell the dollar even more. The moves against the dollar have been relentless since then and though the volumes have been low, the moves are obvious for everyone to see.
Of course, it is anyone’s guess on how long the moves are likely to last and if they will hold water when the trading returns to full strength in a week or two. All these moves have been made against low liquidity and volatility and hence there is no guarantee whether these will hold when the market returns to normal. But till that time, the dollar bulls will have to feel the pain as the bears get to work and push the dollar lower. We are now seeing the pound trading above the 1.34 region as a result.
Looking ahead to the rest of the day, we do not have any major news from the UK or the US and hence we will have to wait and see whether the dollar is able to regain back some of its strength during the course of trading today.
This article was originally posted on FX Empire