Fragile Calm
GBP: The British Pound remains under pressure after falling to a three-week low against the Euro. Concerns are growing that high energy prices will keep pressure on UK inflation and public finances. Rising bond yields last week highlighted investor nervousness, and that risk hasn’t gone away. While markets have stabilised slightly, Sterling remains vulnerable, especially if energy prices stay elevated or sentiment turns negative again.
EUR: The Euro is has found some support after recent losses, helped by a slight pullback in the Dollar. Hopes that tensions in the Middle East could ease are improving sentiment. However, the outlook remains fragile, as higher energy prices are still a risk for the Eurozone economy. Inflation data today will be important, as markets look for clues on how the European Central Bank may respond.
USD: The US Dollar has eased slightly as hopes of a possible end to the conflict reduce demand for safe-haven assets. However, the move lower is limited, as oil prices remain high and uncertainty continues. Markets are also cautious ahead of key US data later this week. For now, the Dollar remains well supported, even if it has pulled back slightly from recent highs.
If you would like to discuss your exchange rates, have any questions about the market or would like to learn more about how we could help, please get in touch.
T: +44 203 440 7550 | E: info@spectrumfx.co.uk | W: www.spectrumfx.co.uk
