Yesterday, GBP/EUR continued it’s push towards the 1.2000 handle as the UK gets back on track after Omicron, benefiting from an economic growth rebound and further expectations the Bank of England will hike interest rates throughout the year. GBP/USD has followed a similar path with cable pushing past the 1.3600 mark, ending the day on 1.3630. EUR/USD has been dictated by headlines surrounding the Russia-Ukraine conflict, settling in over the last few days at 1.1370.
Statistics in the UK are showing commuter travel within cities recovering to pre-Omicron levels, boosting expectation that February will show a strong growth rebound which is strengthening the GBP against both the euro and US dollar. The tensions between Russia and the Ukraine have kept EUR/USD trading between 1.1300 and 1.1400 with mixed reports of a de-escalation and a Russian withdrawal, however satellite imagery shows that the Russian Military are still very much active on the border. The pair will likely be driven by the headlines over the coming days and weeks, dependent on whether Russia stick to their withdrawal claims.
This morning, UK Retail sales data was released, with sales month on month beating market expectation by 0.5%. CPI was also released in France; the European Central Bank will keep a close eye on these stats after changing it’s tune earlier on in the year with regards to a potential interest rate hike.
Have a great weekend.
Thomas Read, Senior Relationship Manager.
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