Home Daily Commentaries GBP/USD hits monthly highs

GBP/USD hits monthly highs

Daily Currency Update

GBP - British Pound

The UK continues to rally against a number of majors, particularly the US dollar, as GBP/USD hit monthly highs on Tuesday, just below $1.3850. The main reason seems to be related to aggressive US dollar selling, however Bank of England Governor, Andrew Bailey has already alluded to the fact that the BoE will raise interest rates by the end of the year, to counteract the growing inflation within the economy. Sterling sold off slightly after hitting these highs, however positive flash manufacturing and services PMI releases, should push the pair past $1.38 again.

Key Movers

Yesterday ECB’s chief economist Philip Lane spoke on interest rate hikes, stating that “market expectations for future interest rates do not square with the European Central Bank's guidance for no hike until inflation is seen stably at 2%”. This didn't shock the markets too much, has this has generally been the ECB's stance for a while, however with other central banks alluding to a rate hike soon, the euro did take a slight hit.

Expected Ranges

  • GBP/USD: 1.3705 - 1.3850 ▲
  • GBP/EUR: 1.1775 - 1.1905 ▲
  • GBP/AUD: 1.8330 - 1.8460 ▼
  • EUR/USD: - ▲