US dollar strengthens against its peers
Thursday 24 March, 2022
Daily Currency UpdateSterling dipped yesterday despite the UK’s CPI reading which came in above expectation at 6.2% vs an expected 6.0%. A high inflation reading can strengthen the case to increase interest rates which can in turn boost the pound. The pound’s weakness may be due to the market’s perception of Rishi Sunak’s Spring Statement yesterday. His measures may not have been considered enough to tackle rising inflation.
Key MoversThe Russia-Ukraine war enters its second month, the energy supply crisis continues, and there are further US Federal Reserve discussions about the size of their next interest rate hike. This uncertainty could give the US dollar some continued strength for the rest of the week. Investors tend to move towards safe haven assets like the US dollar during uncertain times.
This is evident in EUR/USD this morning which opened up below the 1.10 handle. GBP/USD has also dipped with the pair now trading around the 1.3160 mark.
Looking ahead for the day there are flash PMI readings from the UK, US and Eurozone for March. Readings are expected to dip across all three regions.
- GBP/USD: 1.3140 - 1.3235 ▼
- GBP/EUR: 1.1955 - 1.2035 ▲
- GBP/AUD: 1.7585 - 1.7660 ▲
- EUR/USD: 1.0970 - 1.1055 ▼