Daily Currency Update

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Sterling continues its decline

GBP - British Pound

The pound fell yesterday after Bank of England Governor, Andrew Bailey, warned against over-reaction to rising inflation across the UK. Bailey's view was that the UK economy hasn’t fully recovered and that the current spike in inflation is likely temporary. The pound slipped to its lowest level against the US dollar since April and was also at its lowest against the euro for the last 16 days.

Yesterday, the UK reported that Manufacturing PMI decreased from 65.6 in May to 63.9 in June compared to a forecast of 64.2.

Key Movers

Today all eyes will be on the US non-farm payroll figures. It is projected to show that the U.S. economy added 700,000 jobs in June. This is a closely watched macro-economic data release and often moves the US dollar.

The euro rebounded on Thursday despite a mixed bag of data. German retail sales were softer than forecast, declining -2.4% year on year in May, down from a 4.4% increase in April and missing forecasts of 10.1% year on year rise.

EUR/USD has been extending its decline amid ongoing dollar strength. The currency pair is already at its lowest since early April.

The Euro could see further decline, as the European Central Bank seems keen on maintaining its loose monetary policy. In addition, concerns about the resurgence of COVID-19 in Europe, led by the Delta variant, may add pressure on the currency.

Expected Ranges

GBP/USD: 1.3755 - 1.3805 ▲

GBP/EUR: 1.1620 - 1.1655 ▲

EUR/USD: 1.1825 - 1.1845 ▲