Daily Currency Update

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Sterling begins to recover

GBP - British Pound

The pound has been the victim of ongoing Brexit troubles (regarding the sea border with Northern Ireland) and an energy crisis which has seen it become considerably more volatile in the last week. Volatility in the currency has picked up in September and is now on par with levels last seen in July.

We did see the currency make a slight recovery on Friday however, with it in the 1.3430-1.3550 range vs. the US dollar, having started the week at around 1.37. On Friday it reached the 1.16-1.1680 range vs. the euro which is where it started the previous week.

This week no economic data is due out of the UK so the pound could be sensitive to energy crisis news and central bank discussions.

Key Movers

The US dollar has shown strength by pushing up to yearly highs vs. the pound and euro. Markets are looking at the central banks and how they could respond to higher inflation. US Non-farm payroll data is due on Friday and a figure of 450-500K is expected, which may allow the Fed to continue with plans to announce tapering in November.

EUR/USD has advanced for two consecutive sessions now as it climbed back into the 1.16 region following its yearly lows last week around the 1.1560 mark. This week a key determinant in the currency pair could be the responses of central banks to the inflation surge. We have little economic data due out of the eurozone this week, but there are some key ECB speakers to look out for.

Expected Ranges

GBP/USD: 1.3550 - 1.3620 ▲

GBP/EUR: 1.1610 - 1.1690 ▼

EUR/USD: 1.1605-1.1660 ▲

GBP/AUD: 1.8670-1.8620 ▼