GBP/USD
The downwards trend prevails, with the rate continuing yesterday’s losses in strong fashion, pushing the pair onto the brink of reaching its lowest levels seen since November 2020. So far today, important employment data released in the UK has evidently failed to provide much support to the currency. In this data it revealed that unemployment levels have dipped back down to where they were pre-Covid, at 3.8%. This was, however, largely predicted by analysts meaning that this failed to surprise the market all too much. On the other hand, this data will likely be able to support heightened expectations of a Bank of England interest rate hike above 2.00% by the end of the year. Looking at the Dollar, important data releases regarding inflation rates are expected later on today from the US. This will play a key part in the course of action that the Fed chooses to take, with markets already expecting a very hawkish approach by them. Should this data fail to meet the overall consensus, the Dollar will likely be met with heavy downwards pressure. Until this data is released the rate is expected to stay trading in its current region but still has potential to fall even further as the Dollar’s current strength will make it increasingly difficult for the Pound to climb against it.
GBP/EUR
So far today the rate is yet to make up its mind, with it jumping in and out of a decline, influenced by an array of economic and global events. Recently the Euro found some support after the current President of France, Emmanuel Macron, led in the first round of elections. With the second round of elections commencing around the end of this month, support for the Euro may fizzle out in the meantime. For trading today, the Euro will have plenty of opportunities to climb against the Pound, with data expected for release rather soon on economic sentiment. However, the influence of these data releases may be dampened as fresh allegations against Russia for using chemical weapons in Ukraine reignite fears in the market. Currently, the UK government is looking into these allegations with a cabinet minister stating that the UK will respond and ‘all options are on the table’ if it is proven Vladimir Putin used chemical weapons in Ukraine, likely damaging the Euro.
Published by Frank Brightman (12/04/2022)