Daily Currency Update

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Sterling gains ground

GBP - British Pound

The pound advanced yesterday despite PMI data revealing that the UK is slowing its post-pandemic economic recovery. With no high impact UK data due today, eyes will be on the German second quarter GDP reading. Analysts are expecting a confirmation of 1.5% quarter on quarter growth, and 9.2% year on year growth.

In the absence of any notable economic releases, focus could be around the UK's COVID-19 developments. If new cases continue to climb, this could result in the pound weakening.

Key Movers

The US dollar is one of the year’s best performing currencies. It has advanced against most currencies as markets grew more confident that the Federal Reserve could reduce its quantitative easing programme, a move that could lead to an interest rate rise.

The timing of the tapering remains one of the most important topics and could help determine how the dollar performs for the remainder of the year.

Looking ahead, the dollar could face further pressure today, so long as the market mood continues to improve, which tends to steer demand away from the safe haven currency.

Expected Ranges

GBP/USD: 1.3685 - 1.3725 ▲

GBP/EUR: 1.1665 - 1.1705 ▲

EUR/USD: 1.1720 - 1.1755 ▲

GBP/AUD: 1.8825 - 1.8980 ▼