The pound traded with modest gains on Tuesday, following the publication of the UK’s latest employment figures.
EUR exchange rates then bounced back through the middle of the week as the euro’s negative correlation with the US dollar saw it strengthen as the latter initially slumped following the Federal Reserve’s latest interest rate decision.
However, a notable rebound in USD demand, combined with a worrying decline in German factory orders quickly erased the single currency’s gains again at the start of the second half of the week.
The end of the session then saw the euro mount another recovery, this time underpinned by European Central Bank (ECB) rate hike bets.
This followed comments from Bundesbank President and ECB Governing Council member, Joachim Nagel, in which he suggested he is ‘optimistic’ the ECB will raise interest rates in 2022.
Looking ahead, the focus for EUR investors in the first half of the week is likely to be Germany’s latest ZEW economic sentiment index, where another deterioration of economic morale could reflect negatively on the euro.
At the same time, the war in Ukraine is likely to continue to influence EUR exchange rates, with the single currency vulnerable to a potential retaliation from Moscow for the EU’s proposed Russian oil import ban.
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)