GBP/USD takes out key resistance and eyes fresh highs

GBP/USD is trading at 1.3678 within a range of 1.3645 and 1.3682 at the time of writing.

The pound is higher by some 0.22% on the day so far after it rallied as far as 1.3718 overnight.

The risk mood improved before the prices faded to 1.3650.

It was the combination of heightened risk appetite in global markets and UK-specific optimism that sent the pound to new highs, the highest since 2018.

The dollar weakened against major currencies for the third straight session in early European trading, helped by US Treasury Secretary nominee Janet Yellen's urging lawmakers to “act big” on spending and worry about the debt later.

However, the relief among investors that the impact of Brexit has not been as problematic as feard, as well as a lessening of negative rates expectations.

Bank of England's Bailey said negative rates would complicate banks' efforts to earn a rate of return, potentially hurting their lending to companies and has essentially ruled out the possibility of them.