Daily Currency Update

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Pound declined against major currencies

GBP - British Pound

The British pound has been the worst performer amongst the major currencies over the past week. Those hoping for a stronger exchange rate will look to the Bank of England meeting today to see if it provides some support for the pound. This will depend on commentary about interest rates and monetary policy.

Today, FX market traders will have a chance to take a look at the flash readings of PMI reports from UK. Analysts expect Manufacturing PMI to have declined from 60.3 in August to 59 in September, and Services PMI to remain unchanged at 55. A better than expected reading could provide some support for GBP following days of decline against other major currencies.

Key Movers

The US dollar rallied as US Federal Reserve chairman, Jerome Powell, indicated that tapering could begin as soon as November, assuming that economic data doesn’t worsen next month. In what was probably a bit of a surprise to markets, Powell’s comments came off quite positive about the state of the recovery.

Powell revealed in Wednesday’s press conference that the Fed’s quantitative easing programme could end sooner, and its benchmark interest rate could be lifted earlier than previously suggested, which could be good for the USD.

Expected Ranges

GBP/USD: 1.3645 - 1.3685 ▲

GBP/EUR: 1.1645 - 1.1675 ▲

EUR/USD: 1.1705 - 1.1745 ▼