Cost Pressure
GBP
The British Pound gained some support as markets increased expectations that the Bank of England could raise interest rates this year. Rising oil prices also strengthened inflation concerns, adding to expectations of tighter policy. However, worries about higher UK government borrowing costs and their impact on the economy limited gains. A cautious market mood could also weigh on the Pound in the near term.
EUR
The Euro came under some pressure after the latest inflation figures showed underlying price growth easing slightly. This reduced expectations for further interest rate increases from the European Central Bank, weakening demand for the currency. The Euro may find some support if markets become more cautious, as investors often favour safer assets during periods of uncertainty. Limited economic data could keep movement subdued in the near term.
USD
The US Dollar initially gained support as renewed tensions between the US and Iran increased demand for safer investments. However, the Dollar later weakened after US manufacturing activity and job openings came in below expectations. Signs of a slowing US jobs market may reduce expectations for further interest rate increases, potentially weighing on the Dollar. Further weakness in employment could put additional pressure on the currency.
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
