Home Daily Commentaries Pound lifted by China economic support

Pound lifted by China economic support

Jake Trask
Written by
Jake Trask

Jake Trask

OFXpert

Based in London, Jake boasts a rich and extensive career in the foreign exchange industry, spanning 15 years.

| Thursday 26 September, 2024

Daily Currency Update

After reaching a 30-month high earlier in the week, GBP/USD has given up some of its gains as economic concerns in the Eurozone and declining consumer sentiment in the US weighed on risk-sensitive assets like sterling. However, the pound is climbing again this morning as stock markets rally on reports that China is set to introduce additional stimulus measures, building on those announced earlier in the week. This news has been positively received by equity markets globally, as investors anticipate a boost to global economic growth.

After dipping as low as 1.3310 overnight, GBP/USD has rebounded to 1.3350 this morning. Meanwhile, EUR/USD briefly traded above 1.12 yesterday, reaching its highest level in around 14 months as expectations for another 50 basis point interest rate cut from the US Federal Reserve increased. However, the rally was short-lived, as stronger-than-expected New Home Sales data from the US quickly pushed the pair back below this key level. Currently, EUR/USD is trading around 1.1145, while GBP/EUR stands at 1.1970.

Key Movers

Today's key events include speeches from the heads of the US Federal Reserve and the European Central Bank, both scheduled for this afternoon. First, Fed Chairman Jay Powell is due to deliver a recorded message to open the Treasury Market Conference in New York. While the fact that his remarks are pre-recorded means we might not get a clear signal regarding the likelihood of another 50-basis-point rate cut, the speech will still attract significant attention, coming so soon after the Fed's unexpected initiation of its easing cycle with a substantial reduction in borrowing costs.

Shortly after, ECB President Christine Lagarde will provide an introduction at the European Systemic Risk Board's Annual Conference in Frankfurt. Her comments will also be closely scrutinized, especially following Monday's dismal Eurozone PMI data.

Expected Ranges

  • GBP/USD: 1.3300 - 1.3425 ▼
  • GBP/EUR: 1.1925 - 1.2020 ▼
  • GBP/AUD: 1.9390 - 1.9535 ▲
  • EUR/USD: 1.1130 - 1.1215 ▼

Written by

Jake Trask

OFXpert

As a Senior Corporate Client Manager, Jake and his team manage a diverse portfolio of 250 businesses to meet their varied foreign exchange needs. He enjoys untangling the complexities of foreign exchange dynamics, constantly striving to provide clients with the most informed insights and strategies to navigate these fluctuations successfully.