GBP/USD
The past few days the rate has found itself on a very slippery slope, on the brink of exceeding recent multi-year lows. This comes as the Dollar has found itself with renewed strength following Friday’s publication of the latest inflation data over in the States. It was revealed that both CPI and Core CPI smashed market expectations, reaching 8.6% and 6% respectively. On top of this, the Michigan Consumer Confidence Index for June revealed a record low. Although this may be seen as a worrying result, the USD found support as this added to the markets current risk-off mood. So far today the rate has fallen even further, now making for its 5th consecutive day of downwards momentum. This has been bought on as the Pound’s struggle against the Dollar has been exacerbated following the recent UK GDP release. The UK’s GDP yearly growth disappointed as it fell short of consensus, coming in at an underwhelming 3.4%. Also, GDP 3-Month Average came in under expectations at 0.2%. With Brexit woes also weighing on the Pound, it is likely that the currency will find itself struggling to stay put for trading today, with no data to support it. The Dollar will also not have much data to go off for trading today but is expected to remain heavily supported.
GBP/EUR
In recent days, the Sterling-Euro rate has found itself under intense pressure, with the pair printing 3 consecutive days of downwards movement. Last week, the Euro found renewed support following the European Central Bank’s policy meeting on Thursday. Although the Bank did not announce any immediate interest rate hikes in this meeting, it is clear that they are beginning to set the stage for interest rate hikes further down the line. Since then, the Pound has not managed to retrieve its losses and has found itself struggling to stay put. More recently the rate has been impacted by new Brexit issues arising. The UK Foreign Secretary is up for presenting a bill to edit a part of the Brexit deal regarding the Northern Ireland Protocol to the House of Commons. Previously the European Union has sent clear signals that they will retaliate to such moves, potentially ending in a trade war. As for trading today, the Pound has already been pushed down further following the recent publication of underperforming GDP data. For the rest of the day it is likely that the rate will stay put but there is still however potential for it to fall even further.
Morning Update published by Frank Brightman (13/06/2022)