Daily Currency Update

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Pound remains under pressure

GBP - British Pound

The pound came under some notable selling pressure last week, mostly as a result of some disappointing UK data, as well as concerns over a rise in new domestic COVID-19 cases.

Last week’s UK CPI data revealed that inflation cooled more than expected last month. This weakened the appeal of GBP as it dampens the prospect of the Bank of England seeking to tighten its monetary policy in the near term.

There was some better news from UK Manufacturing PMI data, which read at 60.1 vs. expectations of 59.5 this morning.

However, the better than expected outcome for the manufacturing sector may prove to have minimal impact on the pound, given the poor flash services PMI figures coming in at 55.5 vs. the expected 59.0.

Key Movers

Eurozone PMI data came out half an hour ahead of the UK release this morning. It showed that that the Eurozone outperformed the UK in August, an outcome that might be keeping the pound-to-euro exchange rate under some pressure.

Euro traders will be looking ahead to tomorrow’s German GDP data for the second quarter.

Expected Ranges

GBP/USD: 1.3645 - 1.3695 ▲

GBP/EUR: 1.1640 - 1.1675 ▲

EUR/USD: 1.1705 - 1.1745 ▲