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GBP hits a 5 month low against USD
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Daily Currency Update
The British pound has reached a 5-month low against the US dollar today due to the latter’s anticipated higher interest rates in the future. Yesterday, the GBP remained under pressure following the belief that the Monetary Policy Committee (MPC) will agree to a rate cut before the Federal Open Market Committee (FOMC) decides to do so in the US. Yesterday, Andrew Bailey, the Governor of the Bank of England, spoke at the House of Commons Treasury Select Committee and predicted that inflation will fall to 2% in the coming months before rising again in 2024.
Key Movers
Recent data from the United States has raised doubts about the timing of the Federal Reserve’s decision to cut interest rates. This came after strong employment figures in March and a rise in inflation. The markets are now estimating a 41% chance of the Fed cutting rates in July, as opposed to the previous estimation of about 50%. The likelihood of the first cut being implemented in September has now increased to nearly 46%.Expected Ranges
- GBP/USD: 1.2375 – 1.2475 ▼
- GBP/EUR: 1.1685 – 1.1755 ▲
- EUR/USD: 1.0565 – 1.0635 ▼
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