The pound traded with modest gains on Tuesday, following the publication of the UK’s latest employment figures.
This was initially kicked off in response to the ratcheting up of sanctions on Russia from Western powers, the uncertainty over which triggered a broad market sell-off at the start of the session.
While Ukraine and Russia’s attempts at peace talks tempered the US dollar’s gains at points throughout the week, the lack of a breakthrough allowed the ‘greenback’ to quickly resume its rally.
Elsewhere, USD exchange rates were underpinned by comments from Federal Reserve Chair Jerome Powell.
Testifying in front of Congress, Powell said would be ‘appropriate’ to raise interest rates this month, and while he warned the medium-term outlook is ‘highly uncertain’ due to the Russia-Ukraine war he signalled interest rates would likely continue to rise in the months to come.
The US dollar then ended the week on a particularly positive note with the publication of the latest US non-farm payrolls, which reported the US workforce expanded at its fastest pace in seven months in February.
Looking ahead, as the war in Ukraine intensifies its highly likely we will see investors continue to favour the US dollar over its more risk-sensitive peers this week.
In addition to this the publication of the latest US consumer price index could extend additional support to USD exchange rates, as another jump in domestic inflation last month will bolster Fed rate hike bets.
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)