Daily Currency Update

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Pound runs out of steam in its latest bid

GBP - British Pound

Yesterday's move in Sterling slightly ran out of steam as GBPUSD made its way towards 1.40 and GBPEUR headed above 1.1600. GBPEUR is still trading below the levels seen only a few weeks ago whilst GBPUSD has rebounded off the significant level of 1.40 for the 5th time since the start of March. This morning's inflation figures from the UK came in around expected showing that inflation had picked up from March. This was mainly driven by a rise in fuel costs although food prices compared to one year ago have dropped back. Deputy Bank of England Governor, Dave Ramsden, is speaking later this morning but this isn't expected to move the market too much.

Key Movers

The US dollar showed some resilience yesterday with the Dollar Index recovering from some of its recent loses. However, EURUSD rather continues its march onwards and made a run to 1.21 yesterday. This is ahead of the ECB monetary policy meeting tomorrow which is very much anticipated by the market.

Ahead of this as well, we have the equivalent announcement from the Bank of Canada today which is set to be a difficult decision. The Bank of Canada is caught between good data (job growth is strong as an example) and continuing restrictions and depending on what the central bank focusses on USD/CAD could either be making a beeline for 1.25 or 1.27, outside of the range that it has been stuck in for the last month.

Expected Ranges

GBP/USD: 1.3850 - 1.4000 ▲

GBP/EUR: 1.1480 - 1.1640 ▲

GBP/AUD: 1.7950 - 1.8020 ▲

EUR/USD: 1.1960 - 1.2080 ▲