More of the same this morning so far following on from yesterday’s update, where the pound is taking losses against the euro. Sterling is now listed as the worst performing currency in 2022, despite gaining significantly against the single currency at the start of the conflict in Ukraine. Economists are pointing the finger to the rising cost of living which could drive down consumer sentiment and spending within the economy. Typically, in times of uncertainty the pound falls as it is heavily linked to global economic health, with business thriving the pound appreciates, and on the flip side when there is nervousness the pound tends to pull back. However, at the start of the Ukraine war the euro was seen to be more heavily impacted by sanctions on Russia and uncertainty with natural resource supplies. The euro strength has even seen EUR/USD push back above the 1.10 mark.
As reported by the BBC, Europe has announced it’s fourth round of sanctions against Russia, in measures unveiled to reduce exports of luxury goods such as jewellery and cars from the EU.
To highlight again, The Fed will announce their interest rate decision tomorrow evening UK time, with retail sales data releasing earlier in the day. Markets are anticipating the release to find out if the base rate will be raised, which could pile more misery on the pound and even push and keep rates below 1.30.
Have a great day.
Author: Jack Nicholls, Senior Relationship Manager.
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