Market Update 7th March – 11th March

Where you will be able to keep up to date with all the latest changes in the currency market

GBP

Sterling reached another 5-year high against the Euro, the highest since before the EU-referendum, as the situation in Ukraine continues to worsen. The pound rose by 1.2% against the Euro last week as Russia’s persistent attempts to bring destruction and war to mainland Europe continued. However, against the Dollar Sterling is on a downwards trend and continues to struggle as investors move their funds into the safe-haven currency. The GBP/USD is currently sitting at give or take a 17-month low and therefore bodes well for anyone looking to sell Dollars. With regards to economic data, the highlight of the week for the UK comes on Friday with GDP figures coming out. These will give an indication of the state of the economy and will no doubt influence the interest rate decision from the Bank of England next week.

EUR

After a blaze broke out at a nuclear plant in Ukraine towards the end of last week, tensions have continued to develop as the Russian’s show no sign of slowing down their invasion. It has caused the Euro to fall significantly against USD and GBP, with the single European currency at multi-year lows against both. There will be two notable meetings this week that investors will keep their eye on. The first coming on Monday with Russian and Ukraine holding their third round of talks, as the two sides try to negotiate a ceasefire as well as a safe passage corridor for civilians. The second comes on Thursday as the ECB have their interest rate decision to make, which will no doubt cause further volatility for the Euro. Investors will be keeping a close eye on Christine Lagarde and although she has already indicated a rate hike is unlikely, any comments suggesting otherwise could give some much-needed strength for the single currency. 

USD

It is no surprise that during this time of crisis the Dollar has performed significantly well against most major currencies. The EUR/USD rate sits at the lowest it has been since May 2020 as the Euro struggles and Dollar prevails. Some speculation came over the weekend that the US would impose a ban on the importation of Russian oil which caused turmoil across stock markets and strength for the greenback. This week will no doubt be dominated by headlines surrounding the war at hand. However, we have CPI (inflation) figures out on Thursday in the US followed by Consumer Sentiment Index on Friday. Both pieces of data will help the Federal Reserve make their interest rate decisions come next week.