Daily Currency Update

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US dollar picks up on last day of the month

GBP - British Pound

It was a seemingly good day yesterday for the pound as it moved towards its highest level in nearly two weeks, before the US dollar picked up a lot of traction around the London close. Month end moves saw the US Dollar Index pick up 0.3%.

This morning we have the release of Final Manufacturing PMI numbers for the UK and we have already seen UK house prices jump this morning according to Nationwide - this being despite the fact that the stamp duty holiday has finished.

Why this is significant is that the UK is rather unique in that households have a lot of their wealth tied up in their homes and mortgages, so as prices increase then homeowners can end up spending more, adding to consumption figures.

Key Movers

It's been a long time since European inflation hit the heights of 3%. Ten years in fact. Ultra-low inflation was a perennial issue for the former ECB President (and incumbent Italian PM) Mario Draghi but change is afoot in the Eurozone. The question is whether this jump in inflation numbers will sway the current crop at the ECB to move away from their very accommodative monetary policy, a move that could see the euro strengthen, or whether they will keep on dismissing it as simply 'transitory'.

Expected Ranges

GBP/USD: 1.3700 - 1.3800 ▼

GBP/EUR: 1.1630 - 1.1690 ▼

GBP/AUD: 1.8720 - 1.8850 ▼

EUR/USD: 1.1790 - 1.1840 ▲