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GBP holds ground against G10 currencies

Monday 10 January, 2022

Daily Currency Update

GBP remains well-supported and like other currencies has taken advantage of the softer US dollar environment, since the worse-than-expected US non-farm payrolls. Positivity could continue for the pound, as November UK GDP is released tomorrow. It has a predicted release of 0.4% growth, a positive sign for the UK economy, which could keep expectations alive for a further Bank of England rate hike on February 3rd.  

Key Movers

The US dollar edged lower on Friday, even though the US Federal Reserve made recent policy changes in December that boosted investor and consumer confidence. They announced that they would slow down their asset purchase programme which is now scheduled to end in March. Fed Funds futures contracts now expect the chances of a 25bp US interest rate hike at the January 26th meeting to be around 85% - compared to 65% at the start of this year. An interest rate hike could bring some support to the US dollar. The primary US data releases this week will come in the form of CPI data on Wednesday, PPI on Thursday and Core Retail sales on Friday.

Expected Ranges

  • GBP/USD: 1.3530 - 1.3670 ▲
  • GBP/EUR: 1.1920 - 1.2080 ▲
  • GBP/AUD: 1.8835 - 1.8990 ▲
  • EUR/USD: 1.1275 - 1.1370 ▲