Home Daily Commentaries The pound is on the rise against the US dollar

The pound is on the rise against the US dollar

Wednesday 23 November, 2022

Daily Currency Update

The pound rose against the US dollar on Tuesday after falling in the previous trading day, as the dollar fell back after three days of gains. The US dollar, generally the main driver of global currency markets, rose on Monday as a number of COVID-19 cases jumped in China, sparking growth fears and sent investors towards the safe-haven currency, causing the pound to drop over 0.5%. However, with yesterday's decline, sterling rose 0.48% to claw back some of the previous day's losses. Today will be a day of flash services and manufacturing PMI data releases, these readings are scheduled to be released across the globe, with data from the UK and eurozone likely to be the main focus.

Key Movers

The pound has rallied sharply in recent weeks after touching a record low of $1.0327 in September when the government unveiled plans for large unfunded tax cuts. New finance minister Jeremy Hunt last week pledged to raise taxes and cut spending in an effort to bolster public finances and restore market credibility, despite Britain sliding into a recession. The pound's recent rally against the US dollar has mainly been driven by a fall of the latter, with a cooling in US inflation driving hopes that the Federal Reserve might slow down on its aggressive rate hikes. Today's FOMC meeting minutes may give a better indication of how future monetary tightening for the dollar may look. Currently, traders have priced in a 50 basis point increase for December's interest rate decision.

Expected Ranges

  • GBP/USD: 1.1875 - 1.1945 ▲
  • GBP/EUR: 1.1505 - 1.1575 ▲
  • EUR/USD: 1.0275 - 1.0345 ▼