Good afternoon,

Yesterday we saw GBP/USD fall to 1.3086, the lowest we’ve seen since the end of 2020. Safe haven flows continue to dominate the markets as the dollars bull run continues whilst equities drop and commodities rise. Markets remain concerned over the conflict in Russia and Ukraine on global economic activity and inflation. Following the third round of talks on Monday, delegations from Russia and Ukraine were unable to make any progress towards a diplomatic solution or a ceasefire.

The euro again struggled yesterday, with GBP/EUR climbing to 1.2183 and EUR/USD to 1.0815. Investors grow increasingly concerned about a prolonged Russia-Ukraine conflict lifting commodity prices even higher and causing stagflation in the euro area. Russia supplies 40 per cent of the EU’s gas, with Italy, Germany and several central European countries particularly reliant. Today the European Union will outline a plan to cut Russian gas imports by two-thirds within a year as it seeks to reduce its dependency on the country’s fuel supplies after Moscow’s invasion of Ukraine.

Have a great day.

Author: William Jones, Senior Relationship Manager.

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