Daily Currency Update

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Brexit and COVID-19 weigh on the pound

GBP - British Pound

The pound weakened at the end of London trading on Thursday as it’s been reported that Brexit woes continue to impact British trade. The Irish border issue has reportedly knocked UK imports by up to 35% in the first 5 months of 2021, while the number of shipping routes to mainland Europe have as much as doubled.

On top of this, the pandemic continues to grab headlines in the UK, as more than 33,000 cases were reported on Thursday, the highest level since July 23rd.

It’s not all negative news for Britain however as UK Q2 GDP expanded by 22% year on year, showing strong signs of recovery from the pandemic economically. This is higher than analysts predicted and also 28% higher than the Q1 6% contraction.

Key Movers

The US dollar strengthened slightly as it has been reported that several US Federal Reserve officials believe that the central bank will taper their current asset purchasing program in September. The GBP/USD pair dipped from 1.3870 to around the 1.38 handle. The USD index which shows the relative strength of the US dollar against six major currencies stayed around the 93.00 level.

Expected Ranges

GBP/USD: 1.3710-1.3880 ▼

GBP/EUR: 1.1700-1.1820 ▼

GBP/AUD: 1.8730-1.18890 ▲

GBP/CAD: 1.7210-1.7375 ▼