GBP/USD hits 3-month highs as US dollar tumbles

• A weaker US dollar pushed GBP/USD further to the upside.  
• Dollar falls across the board despite higher US yields and the rally in Wall Street.  

The GBP/USD rose almost a hundred pips since the beginning of the US session and recently reached at 1.3175 the highest intraday level since October 17. It is holding near the top, with a robust bullish tone.  

The move higher is being supported by a slide of the greenback across the board. The DXY dropped from 96.50 to 95.92, reaching the lowest in a week. It remains depressed, consolidating below key short-term support levels, signaling that the slide could go on over the next sessions.  

The US dollar is under pressure as the US government remains on shutdown. The main driver behind USD weakness appears to be Federal Reserve policy expectations. A report today mentioned that the Fed is planning to end the balance sheet reduction program earlier than estimated.  

The pound is rising against the US dollar for the fifth time out of the last four trading days and heads for the highest close in three months. Form last week level, it gained so far 300 pips. Technical indicators point to further gains, and so far no signals of a correction are seen. Short-term indicators are starting to show overbought readings.