Daily Currency Update

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Pound gains slow due to COVID-19 concerns

GBP - British Pound

The pound traded relatively flat yesterday as rising COVID-19 cases may have cast some doubts over the UK’s growth outlook.

Economists have expressed concern that the UK's post-lockdown rebound has been running out of steam during the summer months, owing to a string of underwhelming economic data releases.

With no high impact UK data releases today, the focus will be on COVID-19 figures, and should it continue to rise, it could leave the pound vulnerable to losses.

Key Movers

This morning's German Ifo index signalled a loss of momentum for Germany in the second half of the year. The Ifo index dropped for the second month in a row in August and came in at 99.4.

Earlier in the week, we saw a decline in Germany’s PMI data and at the beginning of the month, the ZEW survey showed a sharp decline in sentiment. According to the reports, Germany’s economy is recovering, however concerns of a fourth COVID-19 wave remain which could limit any EUR gains.

Expected Ranges

GBP/USD: 1.3715 - 1.3765 ▲

GBP/EUR: 1.1665 - 1.1705 ▲

EUR/USD: 1.1735 - 1.1775 ▲

GBP/AUD: 1.8885 - 1.8955 ▼