The pound tumbled yesterday after the Bank of England (BoE) forecast a UK recession beginning in the fourth quarter of this year.
This was mostly centred on the war in Ukraine, with hopes for a diplomatic solution to the conflict fading as Russian forces continued to shell civilian targets.
The broadly gloomy market mood was punctuated by brief moments of risk-on trade, which kept USD investors on their feet.
The second half of the week saw some lacklustre US data infuse further volatility into USD exchange rates, mostly notably with the release of the latest US durable goods orders as February’s figures reported a larger-than-expected slump in order growth.
On the other hand the US dollar was supported by rising US Treasury yields, as analysts predicted the Federal Reserve could raise interest rates by 200 basis points in 2022.
The publication of the latest US non-farm payrolls will no doubt be the primary focus for USD investors this week. Analysts are predicting another robust payroll print will see the US unemployment rate fall to 3.7% this month, likely bolstering the ‘greenback’ in the process.
Also in the spotlight will be the latest PCE price index. Another sharp rise in the Fed’s preferred indicator for inflation could further boost rate hike bets and propel the US dollar even higher.
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)