Wednesday 1st June -There was selling pressure on the Pound as investors remained concerned about the situation of the economy. Data indicated that economic confidence had dropped to its lowest level since October 2020 while rising inflation was also a concern for business leaders.
European markets were impacted by the Ukraine-Russia war and that caused the Euro to drop. As the EU banned Russian oil and Russia cut gas supplies, investors were worried that more economic issues were on the way.
The US Dollar grew stronger as a rise in ISM manufacturing PMI beat expectations. A risk-off mood also helped to boost the Greenback amidst a lack of data.
Tuesday 31st May
It was a day of ups and downs for the Pound although it took a downward turn against many of its stronger rivals after data from the Bank of England caused concerns. During April, mortgage approvals dropped while consumer credit rose unexpectedly. What this might indicate is that households are taking on debt in order to cover increasing costs.
The Euro also lost ground against many rivals as Eurozone inflation came in higher than expected. While it is looking likely that the European Central Bank will increase interest rates as a result of the CPI, there are concerns that growth could be slowed down by high inflation and that could result in a recession.
There was some success for the US Dollar as it took advantage of weaker rivals as a drop in market sentiment meant that demand for the safe-haven currency improved. US consumer confidence also added to the mixed feelings around the USD although an improvement in morale still couldn’t stop it from dropping.
Monday 30th May
The Pound slipped behind many of its peers after warnings were made that thousands of businesses in the UK would suffer at the hands of increasing costs. The situation is considered to be more of a ticking time bomb with businesses potentially going bust in just a few weeks, all of which weighs heavily on the Pound.
It was a day of ups and downs for the Euro and even with economic sentiment sitting at the lowest it has been since March 2021, it struggled to gain direction. However, it managed to avoid problems from energy-security concerns as the EU moved towards a Russian oil embargo.
The US Dollar also slipped lower yesterday as a bullish market tone meant that the safe-haven currency was under pressure. Following a lack of US economic data and with Federal Reserve rate hike bets, it meant that there was very little support for the safe-haven currency.
Currency Ranges for the week:
GBP/USD: Low: 1.2462 High: 1.26593
GBP/EUR: Low: 1.16513 High: 1.17687
EUR/USD: Low: 1.06366 High: 1.07856