The pound managed to cling onto the 1.37 level against the dollar yesterday despite the fuel crisis, though it has since succumbed to the pressure and dropped to 1.3680 this morning. GBP-EUR also managed to regain the ground lost last week as inflation fears surge through the market. The euro continues to struggle against the dollar, heading closer to the lows of the year as European gas prices rocket amidst the energy crisis.
Yesterday, it was confirmed the army had been put on standby in the UK to relieve supply chain issues after more petrol stations were closing and queues were growing. The hope is that panic buyers will have stocked up over the last few days and demand will decline this week, but the army is ready should this not be the case. In Europe, electricity costs have shot up to record high levels, weakening the euro. We’ve also seen power cuts in China and if these are to continue, we could see demand rise for safe-haven currencies such as the USD.
Today is quiet on the data front, though we will see a host of speeches from the ECB’s President Lagarde and The Fed’s Chair, Jerome Powell, throughout the week. Investors will be looking for hints from the central banks on policy changes and responses to the energy crisis for impetus.
Have a great day.
Thomas Read, Senior Relationship Manager.
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