Daily Currency Update

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Restriction easing delays continue to weigh on the pound

GBP - British Pound

Boris Johnson continues to weigh down the pound as GBP/USD retraces from 3-year highs of 1.4250 on Monday to the 1.4150s on Thursday morning. The COVID data does not yet show any substantial lift in hospitalisations in areas impacted by the new variant and the government continues to watch the data closely.
In other UK related news, the British government continues to look to join the 11-member Trans-Pacific Partnership trade bloc, including countries such as Australia, Mexico, and Japan. The UK will not join the bloc until 2022 at the earliest however would experience the benefits of joining a high-standards free-trade area and an additional customer base of 500m people.

Key Movers

Inflation in the Eurozone rose sharply in May to 2%, which is just above the Eurozone’s target. Analysts predict that as economic activity recovers in the Eurozone, inflation will continue to increase too. This may negatively impact the Euro over the coming months as price increases outweigh wage growth.
Oil prices continue to rise as yearly highs were reached on Thursday on the back of a decision by OPEC to gradually restore supply. Traders’ eyes are fixated on the key data releases from the US, including ISM Services PMI and unemployment are due on Thursday afternoon. After May’s shocking Non-farm payroll figures were released, employment data has become a critical talking point for this month. Better than expected data should give the US Dollar a short-term boost.

Expected Ranges

GBP/USD: 1.4105-1.4310 ▲

GBP/EUR: 1.1540-1.1705 ▲

GBP/AUD: 1.8245-1.8440 ▲

GBP/CAD: 1.6980-1.7240 ▼