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Bank of England to be questioned by Commons Treasury Committee

Daily Currency Update

There were no UK economic data releases on Friday for Sterling to take direction from ahead of the weekend. GBP/USD, which has been on a steady decline since the end of April, saw fresh lows of 1.2165 early Friday afternoon, but a recovery has been seen ahead of today’s session and it touched 1.2276 overnight.

The Bank of England’s recent outlook for the UK economy warned of slow growth and rising prices which could mean a potential recession by the end of the year. Inflation rose to 7% in March, the highest it has been in 30 years, and could be as high as 9% in April. Consumer Price Index, a measure of UK inflation, is due to be released this Wednesday. Bank of England governor Andrew Bailey is expected to be questioned by members of the Commons Treasury Committee today over the central bank’s stewardship of the economy.

Key Movers

The European Union is due to publish its economic forecasts later today and all eyes will likely be on the impact of the Russia-Ukraine war and soaring inflation on growth expectations.

In February, the EU economy was expected to grow by 4.0% in 2022 and by 2.8% in 2023. Market participants may also be keeping up to date on geopolitical developments as Sweden and Finland move closer to applying for NATO membership.

EUR/USD has dropped to 1.0360 on Friday but has recovered from these lows ahead of today’s session. The currency pair currently sits just over 1.0400. The euro has continued its recent strength against GBP and has fallen closer to 1.1700 after the currency pair made a break for 1.1800 overnight. However, there could be volatility in these currency pairs later this morning as we anticipate the EU economic forecast release.

Expected Ranges

  • GBP/USD: 1.2160 - 1.2280 ▼
  • GBP/EUR: 1.1670 - 1.1790 ▼
  • GBP/AUD: 1.7590 - 1.7830 ▼
  • EUR/USD: 1.0350 - 1.0480 ▲