Pound climbs on economic and coronavirus optimism

  • GBP exchange rates have gained over the last fortnight, as strong economic data and falling Covid cases supported sterling.

    GBP/EUR has climbed from €1.17 to €1.18, and EUR/GBP has dropped from £0.85 to £0.84.

    GBP/USD has fluctuated from $1.38 to just shy of $1.40, currently trading at around $1.39, while EUR/USD rose to $1.19 before dropping two cents to $1.17.

     

    Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…

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    What’s been happening?

    The pound strengthened as Covid cases declined and the UK’s economic outlook brightened, then jumped on a moderately hawkish Bank of England (BoE) statement.

    Inconsistent economic data have weighed on the euro, causing it to lose ground overall, as supply shortages and lockdown restrictions offset strong growth.

    The US dollar, meanwhile, weakened as a riskier market mood weighed on the safe-haven currency, but managed to rebound sharply after the non-farm payrolls figure beat expectations.

     

    What do you need to look out for? 

    Considering the BoE’s slightly more hawkish stance, the UK’s CPI reading for July could cause significant movement in GBP.

    The Euro may find support from the Eurozone’s GDP growth rate for the second quarter of this year, which is expected to recover from last quarter’s slump.

    US inflation is set to ease from 5.4% to 5.3%, but if it overshoots expectations again the US dollar could soar. Paired with recent strong employment figures, above-expected inflation may push the Federal Reserve to act.

     

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