Weekly Report – 28th November – 2nd December

Friday 2nd December -The Pound made up ground and even some volatile trading couldn’t slow it down. This came after fresh hopes of a resolution to the Northern Ireland Protocol dispute helped to cheer investors.

currency news

 

It was a mixed day for the Euro as a drop in German exports, as well as Eurozone producer prices, placed pressure on the single currency. However, any losses were limited as the negative correlation with the US Dollar helped to cushion the blow.

It was a volatile end to the weak for the US Dollar. The non-farm payrolls report came in better than expected while there was also a rise in average wage growth. This caused the currency to spike but doubts about whether the Federal Reserve will slow down policy tightening still remained.

Thursday 1st December

The Pound surged as optimism around less aggressive interest rate rises from the Federal Reserve gave investors hope. In addition to this, there was also an improvement in the UK’s Final Manufacturing PMI and that might have also given the currency a little boost.

It was a similar day for the Euro as it took advantage of its negative correlation with the US Dollar which continued to fall. The single currency was also boosted by unemployment data which showed that unemployment had dropped to a new low of 6.5%.

The US Dollar dropped as markets prepared for an easier approach from the Federal Reserve. The Fed indicated that rate rises are likely to slow while manufacturing activity shrunk, all of which added to the downside of the Greenback.

Wednesday 30th November

The Pound lost ground against many peers as concerns around the UK economy continued to cause problems for the currency. With food inflation reaching new highs and a drop in British business confidence, the currency hit real problems.

It was a bumpy day for the Euro as it reacted to easing inflation and news that the European Central Bank might not increase interest rates. It also struggled as a result of the negative correlation with the US Dollar.

A risk-on market mood caused the US Dollar to soften initially although investors were boosted by mixed US reports later in the day. The JOLTs job openings survey was the main report that gave the Greenback a boost.

Tuesday 29th November

There was no direction for the Pound during trading as a change in market mood caused some volatile trade. The risk-sensitive currency also reacted to cooling in the lending markets and that placed a cap on any gains.

The Euro was volatile, eventually moving lower, even though Eurozone economic sentiment recovered better than expected. This drop came following the release of Germany’s preliminary inflation rate which came in lower than expected.

The US Dollar eventually slipped as a result of a risk-on mood. Despite this, it did recover later in the day as risk appetite eased. Any gains were capped as a result of the latest consumer confidence which had hit a four-month low.

Monday 28th November

At the start of trading, the Pound firmed although it did lose any gains as the day progressed. Investors seemed to be affected by the large drop in the Confederation of British Industry’s distributive trades survey which showed a fast drop in retail sales.

The Euro took advantage of a strong negative correlation with the US Dollar, causing it to spike although it did drop in the afternoon as the US Dollar rebounded. The single currency was also impacted by news that the ECB would raise future rates based on data, all of which placed pressure on the currency.

The US Dollar weakened initially and even a risk-off market mood was not enough to set it off in the right direction. However, risk aversion eventually caused the US Dollar to rise as investors were concerned about the anti-lockdown protests in China and the disruption it could cause to global markets.

Currency Ranges for the week:

GBP/USD: Low: 1.19116 High: 1.22993

GBP/EUR: Low: 1.15376  High: 1.16927

EUR/USD: Low:1.03003   High:1.0544

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