Friday 17th June -The Pound saw good gains at the start of the day following hints that the Bank of England hinted that rate hikes could take place in the future. Despite this, market sentiment dropped during the afternoon and that caused the Pound to lose ground.
The Euro rose against a number of peers, despite there being no real driver behind the movement. The strength of the US Dollar was not enough to dent the single currency, ensuring it protected any gains.
Concerned investors flocked to the US Dollar as they looked to take advantage of the safe-haven currency. As rates were hiked aggressively, it hinted that a global recession might be likely and that meant that investors overlooked riskier currencies and opted for the Greenback instead.
Thursday 16th June
The Pound made good gains as it reached one-week highs against a number of peers following a hawkish stance from the Bank of England. With rates increased by 25 bps, it hinted that the UK economy faced tough times ahead and that more action would be taken if needed.
At the start of trading, the Euro slipped as it was hit by concerns about fragmentation in Europe. However, the afternoon was a different story as it rallied and took advantage of the negative correlation with the US Dollar.
It was a day of struggles for the US Dollar as it only made modest gains against a number of weaker peers. Poor US data placed further pressure on the currency and hinted that economic growth could slow further.
Wednesday 15th June
Following the drop on Tuesday, the Pound managed to recover following a rally in the European markets which helped to provide support for the currency. Furthermore, dip-buying might have also given the Pound a boost following multi-year lows against a number of peers overnight.
It was a good start for the Euro as it reacted to a meeting at the European Central Bank to help deal with financial instability across Europe. Despite this, the outcome of the meeting seemed to disappoint and that caused the Euro to lose any of the gains it made.
The US Dollar inched lower as a result of a positive market mood, which dented the appeal of the currency. Poor retail sales didn’t impact the Greenback as much as anticipated as investors waited to hear more about rate rises from the Federal Reserve.
Tuesday 14th June
The Pound lost ground after it reached multi-year lows against many rivals following the release of UK jobs data that left investors concerned. While wages fell, unemployment increased while the EU is looking as though it might take legal action against the UK in relation to the Northern Ireland protocol.
It was a day of contrast for the Euro as the single currency made gains against many of its peers. This came after an improvement in the German economic sentiment, despite morale still remaining low.
The US Dollar nudged higher following a drop in market sentiment, all of which enhanced the appeal of the Greenback. However, the gains were limited as a worse-than-expected PPI reading held it back.
Monday 13th June
The latest UK GDP data saw a contraction in April and that caused the Pound to struggle during trading. Along with this, tensions surrounding Brexit also weighed heavily on the currency, especially as the government was preparing to scrap some elements of the Northern Ireland protocol.
The Euro also weakened against a number of peers due to a lack of data which meant that there was very little support for the single currency. Furthermore, the strong US Dollar also placed pressure on the Euro as a result of the negative correlation between the two.
The US Dollar strengthened after risk aversion took a hold of markets following concerns around inflation and growth. Along with this, the US CPI also dampened risk appetite, increasing support for the USD.
Currency Ranges for the week:
GBP/USD: Low: 1.19825 High: 1.23906
GBP/EUR: Low: 1.14705 High: 1.1739
EUR/USD: Low: 1.03809 High: 1.05896