Daily Currency Update

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UK GDP figures beat expectations

GBP - British Pound

Lockdowns and Brexit concerns at the beginning of the year led to a 1.5% contraction in the first quarter for the UK economy. Although there are now signs of improvement as we saw a 2.1% rebound in March GDP figures.

There has also been a recovery in retail sales during March, alongside construction growing by over 8% in February and March, levels we have not seen since the pandemic started.

Later today, Bank of England Governor Andrew Bailey speaks again at an online event hosted by the International Swaps and Derivatives Association, which will be followed by the US CPI data release. A better than forecasted US CPI figures could dent the gains that GBP has made over the past two days against the USD.

Key Movers

The dollar fell to its lowest level in two months against the euro, as Tuesday's ZEW Economic Sentiment Index read a better-than-expected 84. Higher US inflation figures could pressure the Federal Reserve to increase interest rates sooner than expected and should this happen, we could see a recovery for the USD.

Expected Ranges

GBP/USD: 1.4125 - 1.4165 ▲

GBP/EUR: 1.1635 - 1.1675 ▲

EUR/USD: 1.2115 - 1.2155 ▲