Potential peace talks dent the dollar
Daily Currency Update
Sterling suffered losses against the euro and the US dollar yesterday, after Bank of England Governor Andrew Bailey commented that the outlook for interest rates in the UK is extremely uncertain. This caused the pound to be sold off for the majority of the day. GBPEUR broke below the €1.18 handle and GBPUSD traded back towards the mid $1.30s.Bailey suggested that the recent squeeze on the population's income caused by the recent price increases is similar to what was seen in the 1970s, which he in turn suggested meant that there was uncertainty on whether interest could be lifted any further in the months ahead.
Key Movers
The main market moving headline from yesterday came from the Russia-Ukraine war with Russia’s deputy defence minister stating “the Russian federation has taken the decision to drastically reduce combat operations in the Kyiv and Chernihiv areas in order to boost mutual trust and create the necessary conditions for further negotiations and for the signing of the aforementioned agreement”. As expected the US dollar devalued against most major currencies as risk on appetite in the market increased and stocks shot up in value.The euro was one of the main benefactors of this news, with EURUSD jumping in value above the $1.11 handle.
Expected Ranges
- GBP/USD: 1.3070 - 1.3175 ▲
- GBP/EUR: 1.1765 - 1.1850 ▼
- GBP/AUD: 1.7380 - 1.7475 ▲
- EUR/USD: 1.1060 - 1.1185 ▲