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EUR/USD comes within a whisker of parity

currency-newsEUR/USD comes within a whisker of parity
The euro US dollar exchange rate came within a hair’s breadth of parity at the end of last week, before the pairing was able to bounce back from its worst levels following the release of the latest US payrolls.

Meanwhile trade in the pound is mixed at the start of this week, with GBP/EUR buoyed at €1.1822 and GBP/USD retreating to $1.1962. GBP/CAD is subdued at C$1.5540, while GBP/AUD and GBP/NZD hold steady at AU$1.7569 and NZ$1.9408, respectively.

Coming up, could we see UK political uncertainty infuse volatility into Sterling at the start of this week?

What’s been happening?

The US dollar got off to a strong start on Friday. A prevailing risk-off mood bolstered the appeal of the safe-haven currency and saw it almost reach parity with the euro.

However the ‘greenback’ was unable to sustain its best levels, relinquishing a good portion of its gains in the wake of the latest US non farm payroll release.

The US economy added more jobs than expected last month, contributing to an uptick in market sentiment and weakening safe-haven demand.

The euro, meanwhile, remained muted at the end of last week’s session with concerns over European energy security continuing to drag on the single currency.

At the same time, the pound was unable to find any strong directional bias on Friday as risk-off flows and uncertainty over who will replace Boris Johnson as UK Prime Minister limited the Sterling’s upside potential.

What’s coming up?

Turning to this week a lull in impactful data at the start of the session could see UK political developments act as a key catalyst of currency movement.

This may see the pound trade with some volatility as the start of the Conservative leadership race will create fresh UK political uncertainty.

In Europe, could we see ongoing concerns over energy security leave the euro on the back foot at the start of the week?

Across the pond, the US dollar is already on the rise as Friday’s stronger-than-expected payroll print bolsters Federal Reserve rate hike bets.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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