Daily Currency Update

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Recovery for the Pound as August kicks off

GBP - British Pound

What a week and recovery for the pound last week! What was looking like a week in the doldrums for sterling against the US dollar and euro it has risen from the lows of 1.36 and 1.15 to 1.39+ and 1.17 respectively. In fact it was the best weekly close for the pound since early May. There was a little recovery from the US dollar though as Friday marked the end of the month and a rebalancing of positions but all in all the pound managed to finish July on the front foot. Ahead of us this week the Bank of England meet on Thursday which could possibly be a low key affair especially with most investors away in Cornwall or Salcombe in August the Bank of England rarely rocks the boat at this time of year. The main headwind for the pound remains coronavirus related numbers but even this is waning for the time being.

Key Movers

We talked recently how the US dollar was sweeping all major currencies aside recently but the shine was taken off last week as it struggled off the back of a rather dovish Federal Reserve meeting. The Fed declared last week that it had made progress towards its goal of full employment and this week we get the latest insight on Thursday with the release of unemployment claims and the Non-Farm jobs report. These data points will remain in focus for investors on either side of the Atlantic before the Fed meet once again towards the end of September.

Expected Ranges

GBP/USD: 1.3850 - 1.4000 ▲

GBP/EUR: 1.1670 - 1.1760 ▲

GBP/AUD: 1.8750 - 1.8950 ▲

EUR/USD: 1.1780 - 1.1900 ▲
1850 - 1.1950 ▲