This afternoon we saw a host of US Data released, and this has caused some movements for both GBPEUR and GBPUSD rates. The data showed that inflation is higher than markets had been expecting. As a result, it’s now very likely we’ll see several rate increases for the USA this year.
In turn, the USD has strengthened, as the prospect of higher interest rates increases demand for a currency, increasing its value and making it more expensive to purchase. This has caused GBP/USD rates to fall further today, from $1.3925 to $1.3825.
We’ve seen an inverse move in GBP/EUR – this pair has risen from €1.12 to €1.1240. This is because a very common currency pair is EURUSD. As the Dollar has gained today, investors have sold Euros to buy the Dollar. As Euros are sold, they decrease in value, becoming cheaper to buy and pushing GBP/EUR rates higher.
So as you can see, despite the lack of any data today from the UK or any Brexit developments, you can still see significant moves in Sterling pairs due to other events in different countries, and the inverse relationship between some currencies.
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