20 December 2022
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…
Latest currency news
The euro has performed well so far in December, with the single currency’s strength stemming from a hawkish European Central Bank (ECB).
During this time GBP/EUR retreated from 1.16 to 1.14, while EUR/GBP clambered from 0.85 to 0.87.
GBP/USD, meanwhile, dipped from 1.22 to 1.21, and EUR/USD spiked from 1.05 to 1.07, before settling at 1.06.
What’s been happening?
The euro struck a new multi-month high in the first half of December. EUR exchange rates soared on the back of the ECB’s latest interest rate decision as the bank signalled it will continue to raise rates at an accelerated pace.
In contrast the pound was undermined by the Bank of England’s (BoE) own interest rate decision. While the BoE raised rates by 50bps as forecast, a dovish split within the Monetary Policy Committee cast doubts over future rate hikes.
Across the Atlantic, another cooling of US inflation weighed heavily on USD exchange rates. However these losses were tempered by risk-off flows, after the Federal Reserve indicated US interest rates will peak higher than previously forecast in 2023.
What do you need to look out for?
Thin trading conditions and a sparse data calendar over the Christmas period could limit volatility in the pound, euro and US dollar over the next couple of weeks.
Any major movement in the currency market may be linked to geopolitical developments. An escalation of the war in Ukraine could weigh on the euro, while concerns over industrial action in the UK could act as a headwind for the pound.
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.
Since 1996 we’ve helped more than 325,000 customers with their currency transfers, just pop into your local Currencies Direct branch or give us a call to find out more.
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