Euro slides towards parity with the US dollar
Daily Currency UpdateGBP/USD hit a low of around 1.2165 yesterday morning, which was the lowest the pair has been since June 30, 2020. The pound has been doing its best to find some support above the 1.22 handle, with the pair currently holding just above this. Since breaking down through 1.30, the pair has been falling consistently ever since and the road ahead for the pound looks like it could be equally bumpy. Yesterday GDP figures for the first quarter were released, coming in below some economists' expectations at 0.8% vs.1% growth. This aligns with expectations of the UK economy slowing down and the current narrative from the Bank of England.
Key MoversFrom the US yesterday we saw PPI figures hit expectation with a 0.5% rise, while core PPI which does not include energy and food, fell slightly short of expectation. PPI figures can have an impact on CPI figures too which can often sway the US dollar, which could be a reason why we saw the US dollar fall slightly against certain currencies yesterday. Elsewhere US Federal Reserve Chairman, Jerome Powell, was confirmed to stay on for a second four year term by the Senate. He went on to give an interview where he seemed to suggest that there could be a potential 50bp interest rate hike in the next two Federal Reserve meetings, though as always this will be heavily data dependant.
Against the euro the US dollar remained well bid yesterday within a high risk environment, particularly surrounding the Russia-Ukraine war. This is in part due to the US dollar’s status as a safe haven asset during uncertain times. As a result we saw EUR/USD fall through a significant support level of 1.050 with the risk of parity possible if we continue to see the pair slide.
- GBP/USD: 12150 - 1.2245 ▼
- GBP/EUR: 1.1705 - 1.1795 ▼
- GBP/AUD: 1.17690 - 1.7805 ▼
- EUR/USD: 1.0355 - 1.0435 ▲