Home Daily Commentaries GBP/USD hits 1.31 after release of Fed minutes

GBP/USD hits 1.31 after release of Fed minutes

Jake Trask
Written by
Jake Trask

Jake Trask

OFXpert

Based in London, Jake boasts a rich and extensive career in the foreign exchange industry, spanning 15 years.

| Thursday 22 August, 2024

Daily Currency Update

The dollar extended its losses yesterday evening following the release of the Federal Reserve’s minutes from its last policy meeting. The minutes revealed that many officials supported a potential interest rate cut at the September meeting, contingent on data continuing as expected. This willingness to consider lowering borrowing costs was noted before the July jobs report, which showed an unexpected rise in the unemployment rate to 4.3%. This development likely strengthened the committee's inclination toward easing policy.

The report was sufficient to push GBP/USD above 1.31 for the first time since July of last year. The next significant level to watch is the 1.3142 high from that month; a break above this would mark the highest level since April 2022. Currently, GBP/USD stands at 1.3090, with GBP/EUR around 1.1760.

Key Movers

This morning, we have noteworthy data with the monthly PMI reports from the Eurozone and the UK. This afternoon, we’ll also receive data from the US. The French services sector appears to have benefited from the Olympics, with the Services PMI rising to 55, up from 50.1 earlier this month. However, the euro has been hit by disappointing results from the French Manufacturing PMI and the German Services and Manufacturing PMIs. As a result, EUR/USD’s impressive advance over the past week has stalled, dropping to 1.1140 after reaching a 13-month peak of 1.1174 yesterday evening.

Following these releases, we’ll turn our attention to the UK and US data, including the weekly US jobless claims, which are currently receiving heightened scrutiny. All eyes will then be on Jackson Hole tomorrow for Fed Chairman Jay Powell's highly anticipated speech. It is expected that Powell will strongly signal a rate cut in September, with particular focus on whether he hints at a potential 50 basis point reduction.

Expected Ranges

  • GBP/USD: 1.3020 - 1.3200 ▲
  • GBP/EUR: 1.1670 - 1.1805 ▲
  • GBP/AUD: 1.9330 - 1.9480 ▲
  • EUR/USD: 1.1080 - 1.1200 ▲

Written by

Jake Trask

OFXpert

As a Senior Corporate Client Manager, Jake and his team manage a diverse portfolio of 250 businesses to meet their varied foreign exchange needs. He enjoys untangling the complexities of foreign exchange dynamics, constantly striving to provide clients with the most informed insights and strategies to navigate these fluctuations successfully.