Friday 11th November -It was a slow start for the Pound on Friday as new data indicated that the UK economy contracted by 0.2% during the third quarter of 2022. This contraction was smaller than expected but a risk-on market mood helped to cap losses.
It was a mixed day for the Euro as it made ground against a number of rivals as a result of a negative correlation with a weak US Dollar. Despite this, an improved market mood meant that the Euro lost ground against a number of riskier peers.
The US Dollar continued to drop as markets continued to trim any bets against a Federal Reserve interest rate rise. Inflation dropped more than expected but a risk-on mood meant that demand for the safe haven currency dropped.
Thursday 10th November
The Pound firmed as Rishi Sunak met with Taoiseach Michael Martin which resulted in hopes rising that the problems surrounding the Northern Ireland Protocol would be dealt with. Furthermore, a drop in US inflation also meant that the currency saw a rally in the afternoon.
The Euro dropped at the start of trading as the European Central Bank sent out warnings about the economy in the EU. Despite this, the single currency did make up some of its losses against a number of peers as a result of its negative correlation with the US Dollar.
The US dollar saw strong losses as pressure on US prices eased more than expected with headline and core inflation coming in below forecasts. The likelihood of more interest rate rises dropped and this pushed the US Dollar to multi-month lows.
Wednesday 9th November
As the economic outlook for the UK took another downturn, the Pound experienced strong losses. Large retailers reported a drop in profits while Made.com went into administration, pushing the currency downwards.
There was a lack of direction for the Euro as mixed data worked against the single currency. The currency was given a boost following hawkish comments from the European Central bank although a negative correlation with the US dollar meant that any upside was limited.
The US Dollar made up ground as a risk-off mood helped to push the currency in the right direction. The midterm election also impacted the US Dollar as the tight results meant that any gains were capped.
Tuesday 8th November
The pound initially weakened at the start of trading as a risk-off mood passed through the markets. Despite this, the currency did make up for any losses during the afternoon. A change in market mood helped to lift the currency while it might have also been boosted by news of further interest rate rises.
The Euro started the day off slowly as it lost ground against stronger rivals and even an improvement in Eurozone retail sales in September couldn’t support the single currency. An improvement in risk appetite across markets also meant that the Euro suffered.
The US Dollar took a sharp drop as analysts suggested that the Republicans would take the lead. As a result, this helped to boost markets which impacted the safe-haven currency.
Monday 7th November
The Pound gathered momentum as it made up for any losses that it saw in the previous week following the news that the Bank of England claimed that the UK was in a recession. There was some dip-buying which helped to boost the currency and an improvement in market mood also helped the Pound.
There was some support for the Euro and this saw it increase against weaker peers as German industrial production figures were better than expected. Despite this, the conflict in Ukraine meant that the single currency lost some of these gains.
As investors reduced their expectations of further interest rate rises, the US Dollar dropped. In addition to this, an improved market mood also meant that appeal for the safe-haven currency fell.
Currency Ranges for the week:
GBP/USD: Low: 1.13409 High: 1.18513
GBP/EUR: Low: 1.1331 High: 1.15038
EUR/USD: Low: 0.9942 High: 1.03899