Weekly Market Report: 7th March – 11th March 2022

Friday 11th March – There was some success for the Pound after UK GDP came in at 0.8% which was above expectations. Despite this, the ongoing war and concerns meant that any gains were limited.

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There was a drop for the Euro as the European Central Bank stated that a rate hike is not likely to happen any time soon. Along with this, Russia continued to attack Ukraine and that caused a downbeat mood and a lack of demand for the Euro.

The US Dollar strengthened as US Treasury yields move higher in readiness for the rate hike that is expected from the Federal Reserve this week. Even though there was a risk-off mood, the safe-haven currency managed to catch some bids.

Thursday 10th March 

The Pound dropped as diplomatic talks in Europe failed as markets had hoped for successful talks to take place between Russia and Ukraine. Despite this, the discussions ended and that had a negative impact on the currency, pushing it downwards.

It was a similar day for the Euro as it took a tumble following talks between Ukraine and Russia. Furthermore, the European Central Bank took a Hawkish stance and that gave the Euro a brief rise as the bank tapered asset purchases at a faster rate. However, these gains were lost as a result of a strong US Dollar and a drop in risk appetite.

The US Dollar had a mixed day, as it moved higher against many of its weaker rivals. It was also boosted by the US CPI which reached a 40-year high although this wasn’t enough to help nudge it  higher against many of its stronger peers.

Wednesday 9th March

There was only sideways movement in the Pound as there was a lack of economic data to push it in any direction. Despite this, risk appetite had improved and that meant that there was a cap placed on any losses while ongoing talks and ceasefire in Ukraine helped the currency.

The Euro strengthened during the day as a result of an upbeat mood that continued on from Tuesday and renewed European optimism. For the second day, evacuations took place in Ukraine, increasing hopes that violence would be de-escalated. However, reports of Russian attacks did put a cap on any gains.

The US Dollar experienced some losses through the session as investors took on a risk mood which meant that demand for the safe-haven currency dipped. The JOLT job opening report was strong but did not give the Greenback a boost, even though it came in higher than expected.

Tuesday 8th March

There was some fluctuation in the Pound during trading as it reacted to a mixed market mood as Ukraine started the process of evacuating civilians. Russia had ignored previous attempts to open humanitarian corridors and so investors remained relatively cautious about the outcome of evacuations.

In contrast, the Euro edged higher during trading following the news that a new EU fiscal stimulus package helped to boost investors. It became apparent that the EU will use a joint-bond sale in order to raise funds that will be spent on energy and defence with the aim of reducing the economic risks associated with the invasion of Ukraine.

It was a mixed day for the US Dollar as it lacked direction while risk sentiment remained subdued.  The US balance of trade and economic optimism saw steep drops that were not expected yet investors mainly chose to ignore this. Instead, the ongoing crisis in Ukraine was the driving force behind trade sentiment.

Monday 7th March

It was a volatile day for the Pound as it lost ground against many of its peers as a result of a lack of data. A change in market mood left the currency exposed although news of Turkey mediating talks between Russia and Ukraine helped to provide some relief. Despite this, the relief didn’t last long and the Pound dropped further.

It was a contrasting day for the Euro as it managed to tick upwards, as it made up for any overnight losses as a drop in oil prices helped to alleviate any pressure on the single currency. The Euro has been hit in recent times as a result of concerns about rising energy prices causing stagflation, so, investors were happy with the pullback in energy prices.

The US Dollar eventually moved higher as the market mood remained relatively downbeat. The USD might also have been given a boost from the impressive non-farm payroll figures from last Friday, which might be needed ahead of the rate decision from the Federal Reserve next week.

Currency Ranges for the week:

GBP/USD: Low: 1.30268 High: 1.32025

GBP/EUR: Low: 1.1869  High: 1.21275

EUR/USD: Low: 1.08312  High: 1.22472


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