Daily Currency Update

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Sterling declines following further restrictions in the UK

GBP - British Pound

Sterling drifted near two-month lows on Tuesday as British Prime Minister Boris Johnson revealed further restrictions to tackle a second wave of the coronavirus. The recommendation to work from home if possible and the 10pm curfew on bars and restaurants does not give much hope for an economic recovery.

EU chief negotiator Michel Barnier is expected to visit London today as part of continuing talks on Britain’s exit from the bloc. Volatility remains for Sterling, however, a positive meeting with more clarity on the outcome could lead to a rally for the pound.

Key Movers

The US Dollar posted strong gains against major currencies this morning, with existing home sales surging to 6 million in August, the highest level in nearly 14 years. This was supported by GBP and EUR weakness due to concerns of a second wave of coronavirus infections.

The greenback could be prone to more volatile swings with uncertainty about this year’s presidential election.

The first presidential debate of the 2020 election between Democratic nominee Joe Biden and President Donald Trump will be held on September 29, where we could experience politically-induced volatility to the currency market.

Expected Ranges

GBP/USD: 1.2600 - 1.2720 ▼

GBP/EUR: 1.0800 - 1.0850 ▼

EUR/USD: 1.1670 - 1.1690 ▼

GBP/AUD: 1.7750 - 1.7860 ▼