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Euro volatile following ECB announcement

GBP - British Pound

GBP/USD was subdued for most of the morning session yesterday. The ECB announcement and President Draghi's less dovish than expected comments then gave the pair a mild boost come the early afternoon. BoE Governor Carney was also in a less dovish mood yesterday, saying that interest rate hikes were still on the table - this also helped support the quid for the most part.

PM Theresa May officially stands down today, and so the leadership contest will get underway fully. She'll remain as interim PM until the next leader is chosen. A Bloomberg poll of analysts, the results of which were released this morning, is suggesting sterling could drop more than 2% to $1.24 in the event a Brexiteer such as front-runner Boris Johnson replacing Theresa May.

Meanwhile Mexico/US trade tensions rumble on. There's no clarity on the situation yet, but talks continue today. Traders also have US Non-Farm Payrolls to look forward to - if Wednesday's ADP jobs report is anything to go by, dollar bulls may be left disappointed by the headline number. We'll find out at 1:30 BST today.

Key Movers

As mentioned above, the ECB announced its monetary policy decision yesterday. As widely expected the bank left rates on hold, and said they'd likely remain on so until the first half of 2020, at least. The details of TLTRO III were also presented, this being a third mode of lending to European credit institutions in order to help stimulate the economy. Overall the statement was interpreted as less dovish than what was expected and EUR/USD pushed higher, coming close to breaking through 1.1300 at a couple of stages yesterday.

Expected Ranges

GBP/USD: 1.2670 - 1.2780 ▲

GBP/EUR: 1.1240 - 1.1350 ▼

GBP/AUD: 1.8150 - 1.8360 ▼

GBP/NZD: 1.9100 - 1.9260 ▼