At the close of Friday, the pound finished the week in a fairly strong position against the single currency of the continent. Finishing the working week with an overall gain of 0.75% which pushed the rate over 1.19, however it ran out of steam before touching 1.1950. In spite of this, against the safe haven currencies such as the dollar and Japanese yen, the picture was not so rosy. Geopolitical tensions in Ukraine continue to dominate the front page of news outlets, with numerous countries advising their nationals to leave the country. This has sent stock prices tumbling globally and price of oil rising.
On Friday, as mentioned above, GBP/EUR gained and EUR/USD fell after the European Central Bank Chief Economist, Philip Lane, made remarks over the Eurozone inflation and what that meant for interest rates. The markets had started to price in more than one rate hike through 2022, however, the Chief Economist effectively pulled back on the expectation by mentioning that the ECB could “accommodate a temporary rise in inflation”.
The week on the economic calendar starts relatively light this week, with the highlight being ECB President Christine Lagarde speaking at the European Parliament. GDP data is released from the Eurozone tomorrow morning, where markets will be awaiting the yearly reading for 2021.
Have a great day.
Author: Jack Nicholls, Senior Relationship Manager.
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