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US dollar remains in focus

Daily Currency Update

GBP - British Pound

Though we have seen some major moves in currency pairs such as GBPEUR and GBPUSD over the last three weeks, these moves have predominantly been driven by what is happening in America.

After what was a quiet August for UK data, September starts in much the same vain. Friday's GDP data is due for release at 7am. This data is expected to be relatively underwhelming and is a month on month change figure.

Focus lies on PM Boris Johnson, who is attempting to push through an increase in national insurance in order to fund social care – supposedly something that many of his party oppose. Other than this, political focus remains on the pandemic. According to Sky News, the NHS is already at 'mid-winter crisis levels during the summer’ and this raises further concerns about the impact of COVID-19 on our health service.

Key Movers

As through much of August, focus remains on the US dollar, as the market digests a very weak US employment data release on Friday. Non-Farm payrolls missed expectations significantly, coming in at 235,000 versus expectations of a figure over 3 times this. The US dollar has remained on the back foot, after uncertainty in the second half of August as to when the Federal Reserve could commence normalising its monetary policy and taper its Asset Purchase Programme started the US dollar's plight.

Many sections of the market are now questioning the poor jobs data as a sign that the US's recovery from the pandemic maybe taking a turn for the worse. This has been put down to the rising infections of the delta variant still having such a huge impact on the travel, tourism and hospitality industries.

There are bank holidays in the US and Canada to kick the week off and a relatively quiet calendar for US for the remainder of the week.

Thursday sees the European Central Bank meeting to discuss their interest rates and monetary policy. The euro has remained on the front foot, particularly against the US dollar of late, hitting a high of 1.1910 on Friday after the US jobs data.

Expected Ranges

  • GBP/EUR: 1.1620 - 1.1680 ▼
  • GBP/USD: 1.3800 - 1.3885 ▲
  • EUR/USD: 1.1810 - 1.1900 ▲
  • GBP/AUD: 1.8510 - 1.8700 ▼