Daily Currency Update

GBP - British Pound

Sterling once again struggled to break the psychological 1.25 mark against the U.S Dollar. Despite negative CBI Distribution data from the UK, Sterling remained fairly muted until speculation surrounding another general election and a phone call between Johnson and Jean-Claude Juncker came to light.
PM Johnson has added a number of Brexiteers to his cabinet already and after a statement from Juncker yesterday, it seems as though the two options that the EU negotiators are willing to offer are a no-deal Brexit and the current offer on the table. Johnson claims that the UK is ‘more prepared’ for a no-deal Brexit than many be. There is no UK data out on Friday so expect GBP positioning to be determined by the strength/weakness of other majors.

Key Movers

The euro had brief periods of weakness yesterday as it dropped to near 2-year lows against the USD and monthly lows against GBP. The dip came after the ECB set up for an interest rate cut in September and a general dovish tone from Draghi. The ECB decided to keep key rates unchanged for July. The Eurozone’s general outlook seems to be worsening, particularly in manufacturing data and there seems to be differing opinions over the degree of stimulus needed to reignite the struggling economy.
Investor eyes’ turn towards the quarterly GDP US data released later on Friday. A big miss raises the chances that the Fed will choose to cut rates at its July 31st meeting by 50bp when 25bp is the current consensus.

Expected Ranges