Daily Currency Update

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Bank of England steps in to sure up market

GBP - British Pound

To be Andrew Bailey is one big task at the moment. The new Governor of the Bank of England only took over the role from his predecessor Mark Carney last week and he has already slashed interest rates to an all time low of 0.1% yesterday. Alongside this he also announced a new £200bn bond purchasing programme. This was another surprise move from the central bank, who still plan to meet next week, but the announcement had a positive effect for sterling and the FTSE 100 bouncing. As a result it looks like GBP/USD could stave of dropping through 1.14 (for the time being) and GBP/EUR has recovered from the lows around 1.06.

Key Movers

With so many developments dropping throughout the week from Covid 19 updates, to central bank meetings it is difficult to concisely run through all the G10 currencies. Focusing on the commodity currencies though, which have largely been forgotten, it was a roller coaster yesterday. The Canadian dollar has managed to claw back 2% against its US counterpart largely thanks to the biggest single one day jump in oil prices on record - 24%. Whilst the Australian dollar is also making moves back towards the 0.60 handle against the US dollar. The story of the week has been the unstoppable force of the US Dollar which has surged against all of its peers, however it looks like as we move into the weekend that the tide is changing largely thanks to the action of the Fed who have opened up swap lines (liquidity) with a number of smaller central banks including Singapore and Australia.

Expected Ranges

GBP/USD: 1.1600 - 1.1880 ▲

GBP/EUR: 1.0700 - 1.1000 ▲

GBP/AUD: 1.9700 - 2.0000 ▼

GBP/NZD: 2.0000 - 2.0400 ▼

GBP/CAD: 1.6550 - 1.7000 ▼