Friday 10th June -There was a sharp drop in the Pound as further economic fears weighed heavily on the currency. Along with this, the government will implement a bill that overrides parts of the Northern Ireland protocol leading to fears that the UK economy could be damaged.
The Euro also lost ground against many of its rivals after the decision from the European Central Bank held it back. Despite this, it did manage to rise against riskier rivals during the afternoon.
After news that US inflation rose in May, the US Dollar soared as inflation reached the highest level seen since 1981. Furthermore, Federal Reserve rate hike bets were also reignited and this helped to boost the Greenback.
Thursday 9th June
Despite there being no clear driver, the Pound pushed higher and even a poor economic growth forecast couldn’t hold it back. It seems as though the Pound might have benefitted from a sell-off in the Euro while consumer confidence also increased.
There was an initial spike for the Euro following the decision by the European Central Bank to implement a 25-bps rate increase in July. The hawkish comment gave the single currency a boost although the ECB quickly downgraded growth projection and that caused the Euro to slump.
The US Dollar made up ground against many of its peers following the ECB announcement as investors reduced their risk appetite. The rapid drop of the Euro gave the USD a boost and this meant that the Greenback benefitted.
Wednesday 8th June
As fears surrounding the UK economy rumbled on, the Pound lost ground as investors showed concerns for the economic outlook. Growth forecasts were slashed again and it is believed that the UK economy will stagnate in 2023, adding further misery to the currency.
It was a day of contrast for the Euro as it surged after the Eurozone GDP growth rate estimate was revised higher. As a result, the single currency was boosted despite the ongoing invasion of Ukraine.
Initially, the US Dollar nudged higher as the appeal of the safe-haven currency increased as a result of a risk-off mood. Despite the rise, the increase in the Euro caused the USD to drop in demand as investors sold the Greenback to purchase the single currency.
Tuesday 7th June
Prior to the start of the European session, the Pound dropped although it did manage to recover these losses. The recovery came after it was announced that Boris Johnson had survived a vote of no-confidence and this helped to stabilise the currency while an increase in the UK’s final services PMI also boosted the Pound
An unexpected drop in German factory orders concerned investors and this caused the Euro to lose ground against many of its peers. Tensions between Russia and Ukraine continued to grow which caused problems for the single currency and this is something that is not going to end any time soon.
It was a mixed day for the US Dollar, despite a relative downbeat market mood. A drop in US Treasury yields placed pressure on the USD and this pushed back against any support towards the safe-haven currency.
Monday 6th June
It was a day of good news for the Pound as it rose following news that Boris Johnson would have to face a no-confidence vote later on in the day. It was expected that Johnson would come out on top and would remain in power for another year, all of which helped to stabilise the Pound during trading.
As tensions between Ukraine and Russia intensified, the Euro lost ground, especially after Russia attacked Kyiv for the first time in a month. Russia then announced that it would hit new targets if the West provided Ukraine with long-range missiles. All of this weighed heavily on the Euro in the same way that it has caused problems for the single currency since the war started.
There was an initial drop for the US Dollar as a risk-on mood meant that demand for the currency suffered. Despite this, the currency managed to claw back some of these losses later on in the day even though there was no clear driver for this change in direction.
Currency Ranges for the week:
GBP/USD: Low: 1.23043 High: 1.25988
GBP/EUR: Low: 1.16432 High: 1.17769
EUR/USD: Low: 1.0508 High: 1.07628