British pound is near a three-month high
Friday 28 May, 2021
Daily Currency UpdateThe British pound is near a three-month high, in part due to commentary that the Bank of England could raise its interest rate earlier than planned.
Bank of England policymaker, Gertjan Vlieghe, said the central bank could raise rates as early as Q2, 2022, if the economy rebounds more quickly than expected.
The pound is the second best-performing G10 currency versus the USD this year, up 3.3% year-to-date. A quicker reopening for Britain’s economy on the back of its rapid COVID-19 vaccination programme could push sterling higher against the euro and the dollar.
Key MoversIn the US, the dollar moved higher as US President Joe Biden is expected to propose a $6trillion budget for 2022 today, as the US continues its economic recovery from COVID-19.
A further boost was given to the USD following Thursday’s positive employment data. The number of initial jobless claims filed for the past week in the U.S. dropped to 406,000, a 14-month low.
The market now awaits the Core Personal Consumption Expenditure Price Index for April, due later in the day, amid concerns that a higher than expected figure could force the U.S. Federal Reserve to tighten its monetary policy, which could move the USD higher.
- GBP/USD: 1.4190 - 1.4225 ▲
- GBP/EUR: 1.1635 - 1.1655 ▲
- EUR/USD: 1.2185 - 1.2215 ▲