Daily Currency Update

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Sterling focuses on the Queen’s Speech

GBP - British Pound

The focus will be on the Queen’s Speech later today, which will set out the government’s agenda for the new Parliament. It will be interesting to see if lawmakers take up another round of fiscal measures. These would aim to help drive the post-Covid recovery and could fuel further gains for sterling.

The pound rose by over 1 percent against the dollar over the course of yesterday, the highest level since February. There could still be more demand for GBP because the Bank of England is expected to reduce monetary stimulus earlier than the Federal Reserve, which is another positive case for GBP gains.

Key Movers

The rise in inflation expectations drove the US dollar higher against the euro. While non-farm payrolls figures disappointed, this week’s consumer price index and retail sales reports could beat expectations and avert further losses for the USD.

The euro remains supported by Europe's accelerating vaccination campaign. Europe is catching up with the US with COVID-19 cases falling and roughly 30% of EU residents having received their first jab. Should this momentum continue, we could see an upswing in euro gains on the dollar.

Expected Ranges

GBP/USD: 1.4115 - 1.4255 ▲

GBP/EUR: 1.1615 - 1.1655 ▲

EUR/USD: 1.2135 - 1.2175 ▲

GBP/AUD: 1.8005 - 1.8065 ▲