20 February 2023
Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…
The past couple of weeks have seen movement in the currency market grow increasingly volatile amid frequent repricing of central bank interest rate expectations.
During this time, we’ve seen GBP/EUR climb to a high of €1.13 before falling back to €1.12, whilst EUR/GBP slipped from £0.89 to £0.88.
Meanwhile, GBP/USD traded between $1.22 and $1.19, while EUR/USD briefly fell to $1.06 before rebounding to $1.07.
Some hawkish remarks from Bank of England (BoE) policymakers, and confirmation the UK narrowly avoided a recession help propel the pound higher in the first half of February. However, a softer-than-expected inflation print swiftly reversed these gains as it upended BoE rate hike bets.
On the other hand, the US dollar, after initially struggling amid an upbeat market mood, strengthened on the expectation the Federal Reserve will raise interest rates at least twice more this year.
Meanwhile, the euro faltered over the past couple of weeks. Weak data and concerns over Ukraine acting as headwinds for the single currency.
Looking ahead, the threat of an escalation of the war in Ukraine may see the euro struggle to attract support in the coming weeks. A widely expected ground offensive from Russia could see EUR exchange rates plummet.
Meanwhile GBP investors will be keeping a close eye on upcoming UK data. While the UK may have avoided a recession at the end of 2022, signs that economic growth remains sluggish at the start of 2023 could drag on Sterling.
On the other side of the Atlantic, growing confidence for rate hikes from the Fed at its next two policy meetings are likely to underpin the US dollar. As is an increasingly gloomy market mood.
At Currencies Direct we’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.
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