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Pressure remains on the pound

Daily Currency Update

GBP - British Pound

The pound declined yesterday against the US dollar and the euro in part due to concerns over rising UK energy prices. A less stable economic outlook for the UK can cause investor risk sentiment to weaken.

The Bank of England meets tomorrow but changes to their monetary policy and interest rates are not expected by the market. Among uncertainty such as falling stock prices, and increasing COVID-19 Delta variant cases, the Bank of England may be reluctant to talk about raising interest rates.

The UK's furlough program also ends this month, which could lead to some weakness in the economy.

Key Movers

The euro struggled for direction on Tuesday amid a lack of fresh catalysts and with the German elections looming at the end of the week.

Today attention will likely shift to the Eurozone consumer confidence data release. Consumer confidence declined in August amid growing concerns over the spread of the COVID-19 delta variant and rising prices. Another worse than expected reading could mount pressure on the euro this week.

Expected Ranges

  • GBP/USD: 1.3615 - 1.3655 ▼
  • GBP/EUR: 1.1605 - 1.1645 ▼
  • EUR/USD: 1.1705 - 1.1735 ▼