After 5 days of losses against the dollar, the euro to dollar exchange rate has dropped to record 5-year lows. Falling over 4% in the past 5 working days and this morning, you would have to go back to March 2017 to find a similar price when the rate was picking up after dropping into the 1.03 level. Risk sentiment in the fallout of Russia’s invasion of Ukraine remains high with the dollar continuing to strengthen, as in any time of nervousness. The euro has also weakened following Russia cutting supplies of gas to both Poland and Bulgaria, leaving EUR/USD touching 1.0481 before bouncing back up. Sterling has taken advantage of the euro drop and is hovering higher and back into the 1.19 range, just.
GBP/USD still sits in the 1.2550 region following the aggressive drop off over the previous 5 working days. In the UK the pound is little supported. Inflation remains at the highest level for years, wage growth in line with inflation is stagnant, cost of living for the everyday consumer continues to increase and poor retail sales data failed to give any confidence to traders last week. After bouncing up off 1.2494 this morning, the rate has started to marginally pick up however.
Have a great day.
Author: Jack Nicholls, Senior Relationship Manager.
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