Daily Currency Update

Get access to our expert daily market analyses and discover how your currency has been tracking with our exchange rate tools.

FOMC meeting minutes released

GBP - British Pound

Yesterday UK CPI showed a fall from 2.5% to 2% with the retracement expected. Eyes turned to headlines for pound movement, with the news dominated by the recent growing COVID-19 cases, and by the one day recall of parliament regarding the withdrawal from Afghanistan.

GBP/USD traded within a 30 pip range for the majority of yesterday’s session, but overnight the currency pair has fallen. This can be pinpointed to news in the US with yesterday's FOMC meeting minutes suggesting that a tapering of its bond-buying program could occur later this year, which strengthened the dollar. GBP/USD has dipped from 1.3770 to below 1.3700 this morning.

GBP/EUR hasn’t seen the same level of volatility, but is also lower this morning. In the past few hours, it has gone from 1.1750 down to 1.1717.

There is no UK data due today, so movement could take the lead from the risk-off markets following the FOMC announcement yesterday. GBP/USD could take direction from US employment data also.

Key Movers

Federal Reserve officials at their July gathering made plans to pull back the pace of their monthly bond purchases likely before the end of the year. During the meeting minutes released on Wednesday, central bankers wanted to be clear that the reduction, or tapering, of assets was not a precursor to an imminent rate hike. The minutes also noted that some members preferred to wait until early in 2022 to start tapering.

Concerns are growing that the reining in of the Fed’s pandemic-era stimulus measures could occur just as the global economic recovery is showing signs of stalling, as countries take measures to combat the spread of the Delta COVID-19 variant. As this is the case, the safe haven USD, JPY and CHF have been bought overnight, notably seeing the USD gain against the GBP and EUR.

Expected Ranges

GBP/USD: 1.3670 - 1.3790 ▼

GBP/EUR: 1.1660 - 1.1750 ▼

EUR/USD: 1.1640 - 1.1720 ▼

GBP/AUD: 1.8920 - 1.9190 ▲

GBP/NZD: 1.9920 - 2.0140 ▲