GBP extends its gains against the USD
Daily Currency Update
Yesterday's data from the UK revealed a 0.1% monthly decline in GDP for May, surpassing expectations of a 0.3% contraction. As a result, GBP/USD surged beyond the 1.3100 level, experiencing a gain of nearly 1% on Thursday.This upward movement was primarily driven by the overall weakness of the USD following the Federal Reserve's announcement that it is nearing the completion of its tightening cycle, prompted by June's soft PPI and CPI data. After reaching a daily low of 1.2979 on Thursday, GBP/USD reached a high of 1.3111.
Although the economy did not exhibit growth, concerns of an impending recession persist, given the Bank of England's intention to tighten monetary policy in order to address the elevated inflation levels of 8.6 percent.
Key Movers
The dollar remained at its lowest level in 15 months this morning, indicating that it may be heading towards its worst week since November. This downward trend was driven by market speculation that the Federal Reserve is nearing the conclusion of its cycle of interest rate hikes due to easing inflation.Despite this sentiment, Federal Reserve officials continue to exercise caution. Federal Reserve Governor Christopher Waller expressed his reluctance to declare a complete resolution to US inflation concerns and expressed a preference for further rate increases throughout the year.
Expected Ranges
- GBP/USD: 1.3095 - 1.3175 ▲
- GBP/EUR: 1.1635 - 1.1725 ▲
- EUR/USD: 1.1205 - 1.1275 ▲