Trade in the Pound remained highly erratic on Wednesday as the Bank of England (BoE) announced an intervention in the bond market.
However, a pullback in the US dollar eventually helped to lift the euro, thanks to EUR’s negative correlation with USD. Continued USD weakness supported EUR throughout the week, helping it rise against its weaker peers.
The euro did face headwinds, however, which kept a tight lid on any gains. Gas supply concerns continued to hang over EUR, while a report on the cost of the Russia-Ukraine war to the German economy also hurt the currency.
Despite a larger-than-expected rise in Eurozone industrial production on Friday, the euro weakened. A recovery in the US dollar dragged EUR lower.
Turning to the week ahead, Germany’s ZEW economic sentiment index, due out on Tuesday, could further dampen EUR’s appeal. Economists expect the indicator to remain near a ten-year low.
Data later in the week, such as the final inflation rate reading and second estimate for GDP growth, could impact the euro if they differ from preliminary results. Otherwise, EUR may trade primarily on energy supply news and USD movement.
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)