• Covid cases have fallen to 23,228 on 27 July
  • GBP is close to breaking to levels not seen since the beginning of April
  • Traders brace for next Fed meeting

The Pound Euro (GBP/EUR) exchange rate has traded higher for two consecutive days. The GBP to EUR pair was seen trading on Tuesday within a trading range of 1.1687 and 1.1748, settling up 0.32% to 1.1745.

At 07:10 UTC, GBP/EUR trades slightly down -0.04% at 1.1740.

British Pound surged to its highest level in almost two weeks and threatens to break to levels not seen since 6 April. There is no clear catalyst behind the strong surge in the British Pound as most traders are waiting for more clues from the Fed.

Analysts said the move might be due to portfolio rebalancing flows that are usually seen at the end of the month.

Meanwhile, the UK Covid cases have been falling for almost a week. The most recent figures available showed that COVID hospitalizations are slightly higher to 5,918 people as of Monday. At the same time, COVID cases have continued to steadily fall to 23,228 as of 27 July.

Key Economic Data Ahead

Taking a look at the European and UK economic calendar there are no major risk events during the session ahead. Foreign exchange market traders will focus on the Fed’s monetary policy statement and interest rate decision scheduled to be released later in the day after the London close.

Traders are largely focused on Powell’s view on inflation which might force the US Federal Reserve to start hiking rates early than expected to tame inflation. Currently, the Fed policymakers view two rate hikes by the end of 2023.