International leaders will meet in London to decide on next steps and potential further sanctions on Russia, following the invasion of Ukraine over a week ago. Oil prices have sky rocketed this morning, reaching a high of over $138.00 a barrel before pulling back, as the US discusses bans on Russian imports along with other countries. During April 2020, at the height of Covid lockdowns globally, prices for Brent crude hit a low of $16 a barrel as demand dried up.
Haven currencies have been gaining too, through the end of last week and into this morning GBP/USD has dropped nearly 2% and sits at 1.3167 at the time of writing.
GBP/EUR however has seen the opposite move, as the continent bears the brunt in the market for the conflict in Ukraine and the resulting sanctions on Russia. GBP/EUR has seen multiple pushes towards the 1.20 handle over the previous six years. However, there has not been enough traction to sustainably hold above the level as selling pressure mounts and the rate swiftly pulled back. This has happened eight times over the last six years.
You would have to go back to 24 June 2016 to execute at a rate similar to where we are now. This was the day when GBP/EUR dropped nearly double digits through the end of the working week, following the UK vote to leave the European Union. Similarly, with the euro falling, EUR/USD has plummeted to sit well below 1.10 and is currently reading at 1.0863 at the time of writing.
Have a great day.
Author: Jack Nicholls, Senior Relationship Manager.
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