Daily Currency Update

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Increased Covid-19 Cases Weigh on Sterling

GBP - British Pound

Sterling finished the week in negative territory as an increase in Covid-19 cases, potential increased and new lock down measures, and the Bank of England suggesting it is examining the possibility of negative interest rates all kept Sterling under significant selling pressure.

The prospect of a national lock down is weighing on Sterling at the start of this week. New cases of Covid-19 have almost doubled to over 6000 per day, with hot-spots including parts of Northern England and London. The effect a second national lock down would have on many sectors, including the hospitality sector, has sent many stocks tumbling at the start of the European open.

Looking ahead this week we have Bank of England Governor speaking on Tuesday, followed by manufacturing and services PMI data on Wednesday. We can expect a volatile week for Sterling again, as Brexit negotiations will also weigh on the currency, unless we finally get some positive rhetoric from either the UK or the EU.

Key Movers

Throughout the week, European lawmakers will be meeting to discuss a number of concerns they have with the current external geopolitical situation. These range from tensions with China to Brexit negotiations. There will be a raft of manufacturing and services data released on Wednesday morning to look out for.

The Dollar has an extremely busy week ahead with a raft of economic data being released throughout, including manufacturing and services data, crude oil inventories and durable good orders. To add to this Fed Chairman Jerome Powell is appearing before Congressional Committees throughout the week.

Expected Ranges

GBP/USD: 1.2790 - 1.2930 ▼

GBP/EUR: 1.0805 - 1.0940 ▼

GBP/AUD: 1.7590 - 1.7780 ▼

EUR/USD: 1.1765 - 1.1880 ▼