GBP/USD
Still the downwards trend prevails, with the rate having now printed consistent losses for 5 days, showing no signs of slowing down. This comes as the Dollar continues to siphon an immense amount of strength following a basket of Global happenings. One such event that has recently favoured the Dollar is the prospect of more Covid lockdowns in China shaking up markets and causing investors to take the back foot. Despite most of the world growing less sensitive to developments with Covid-19, lockdowns in China have an imminent impact on an international scale due to the prominence of their country in global markets. To add to this, the FX markets are still heavily pricing in an interest rate hike by the Federal Reserve, America’s central bank. All of this spell’s trouble for the Pound, with the currency finding itself with not much to chew on and already struggling by itself as the outlook for the British economy continues to deteriorate. With all of this in mind, it can be expected that the Pound will find itself trapped in this downwards trend for quite some time. As for economic data, the absence of data coming from the UK this week may exasperate current losses against the Dollar even further.
GBP/EUR
Last week we saw the rate plummet as Sterling crumbled following disappointing economic data, pushing it all the way down to monthly lows. On the Brightside, the rate has since made a slight recovery, with it now printing a 3-day upwards trend. However, there is still a long way for it to climb to erase the losses we recently experienced. The Euro has found itself with a brief degree of support following Emmanuel Macron’s victory in the French Presidential elections, a prospect that Euro investors were pleased by. With this having passed, it is evident that the rate is now sitting in a slightly neutral position, waiting to make a definitive movement. This week will be particularly interesting for the rate due to the absence of high impact data coming from the UK and the Eurozone’s contrary abundance of data. Friday is the day that we will likely see a sizeable shift of the rate as an array of data regarding European GDP and inflation is expected. If the data goes down well with investors, it will likely provide a very large boost as said data will have a key influence on the European Central Bank’s interest rate decision.
Published by Frank Brightman (26/04/2022)