Daily Currency Update

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Mixed news for the pound

GBP - British Pound

It was a hectic week last week for sterling as it outperformed against the euro, whilst declining against the US dollar. The dollar remains the key currency at the moment, particularly given the diverging news stories coming out of the UK and US. Whilst the Bank of England held back on raising interest rates at the start of this month, America saw inflation figures hit 30 year highs last week with many analysts now forecasting two rate hikes from the Federal Reserve by the end of 2022. This has caused GBP/USD to tumble over the last week or so and reach 11 month lows.

This week there are a few data releases due that could aid the pound’s recovery, or at least begin to build a narrative towards a recovery. On Tuesday we have the latest UK wage and employment figures, whilst on Wednesday we have inflation figures.

Key Movers

For the euro it still remains on the backfoot as well. It lost ground against the pound last week, and its suffering heavily against the US dollar and trading near lows not seen since July 2020. Rising Covid cases across Europe are also acting as an anchor for the currency and with the Netherlands entering a lockdown, investors are waiting to see if Germany and Austria will follow suit as well.

Expected Ranges

GBP/USD: 1.3400 - 1.3550 ▼

GBP/EUR: 1.1670 - 1.1730 ▲

GBP/AUD: 1.8210 - 1.8320 ▼

EUR/USD: 1.1430 - 1.1590 ▼