GBP/USD holds firm as markets await key US economic data
Daily Currency Update
Sterling remains steady today, GBP/USD trading just over 1.35, maintaining its position near recent highs. Despite a slight dip yesterday - attributed to a strengthening US dollar following a 0.53% rise in the dollar index - the pound has shown resilience. This stability is underpinned by investor optimism regarding the UK's economic outlook, even in the face of recent manufacturing data indicating contraction.Technical analysts suggest a potential bullish correction, with resistance levels anticipated near 1.36 for GBP/USD. However, a decisive break above 1.38 would be required to confirm a continuation of the upward trend. Conversely, a drop below 1.33 could signal a bearish reversal, targeting levels around 1.32.
EUR/USD trades near 1.1385, retreating from Tuesday's high of 1.1455. This pullback follows eurozone inflation data falling below the European Central Bank's 2% target, increasing expectations of a rate cut on Thursday. Markets are now focused on the ECB's upcoming policy decision, with potential implications for the euro's trajectory. Spanish, Italian, French and German PMI data out today as well.
Key Movers
Across the pond today we have ADP Non-farm Employment Change - Previous 62K vs Forecasted 111K at 1.15PM, also the release of ISM Services PMI and Final Services PMI at 2.45pm and 3pm. Finally, the US Beige Book release at 7PM.Over in Canada, we have the BoC Interest Rate Decision. The Bank of Canada is likely to hold interest rates at 2.75% today as policymakers await further news on an economy that grew faster than expected last quarter, with at least two more cuts likely this year, according to a majority of economists.
Expected Ranges
- GBP/USD: 1.3460 - 1.3565 ▼
- GBP/EUR: 1.1870 - 1.1960 ▲
- GBP/AUD: 2.061 - 2.09 ▲
- EUR/USD: 1.1345 - 1.1430 ▼