Pound sterling continued its push against EUR yesterday, landing at a new two-week high. GBP climbed above 1.1980 for the first time since the “Black Thursday” crash on February 3rd, when UK energy prices increased more than 50% and fuel costs more than 30%. The pound was once again put on the back foot, with inflation continuing to rise above 7% and the BoE raising interest rates a further 0.25% in an effort to curb living costs.
The EUR has come under pressure over the past few weeks, with rising political pressure at the Ukraine-Russia boarder. It was reported this morning that tensions are starting to ease, with Russia pulling back some of its troops at the boarder. The Russian Defence Ministry spokesman reported to media that “Units of the Southern and Western Military Districts, which have accomplished their missions, are boarding trains and trucks and will head for their garrisons later today”. This statement and the movement of troops has provided some much-needed respite for the EUR, allowing it to regain some losses against both GBP (1.1940) and USD (1.1347) this morning.
A quiet data day today will see investors look to the headlines for further indication on market movements. Tomorrow will be a busy day for inflation readings, with Consumer Price Index data being released from China, UK and Canada respectively.
Have a good day.
James Camp, Senior Relationship Manager.
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