GBP at its highest levels against the USD since August
Thursday 24 November, 2022
Daily Currency UpdateThe pound has had a problematic year against the US dollar, the pair experience fluctuations of over 24% in 2022 and was not far off from parity after the recent mini-budget. Sterling has since recovered and for the first time since August, GBP/USD hit $1.21 this morning as traders believe the Federal Reserve may now look to slow the pace of its interest rate increases.
A stronger pound could help cool the UK’s inflation crisis, as it’ll make imported goods like fuel and energy less expensive – although GBP/USD has gained 20% since the mini-budget collapse, sterling is still down 10% against the dollar in 2022.
GBP/USD rallied yesterday due to weak economic data and the latest Federal Reserve minutes.
Key MoversMinutes from the Federal Reserves policy meeting showed that a “substantial majority” of policymakers reckon it will “likely soon be appropriate” to slow the pace of rate hikes as the economy adjusts to more expensive credit. A 50 basis point increase is expected for December's rate decision and a 25 basis point is priced in for the February meeting.
US markets are closed for the Thanksgiving holiday today, and liquidity and activity will be light on Friday. This could allow Asian indicators and events to exert greater influence over local markets this week and we could see greater levels of volatility in the markets.
- GBP/USD: 1.2045 - 1.2125 ▲
- GBP/EUR: 1.1565 - 1.1645 ▲
- EUR/USD: 1.0385 - 1.0445 ▲