Last week saw much calmer market conditions compared to what has taken place over the past 6 months, with cable sitting between 1.22 – 1.23 for the majority of the week, and EUR/USD trading between 1.0450 and 1.0550.
The dollar has weakened over the last few weeks as inflation seems to be taming according to the US FED, and GDP figures look steady in the hope of avoiding a global recession. This has put some risk appetite back into the markets, and along with the FED taking a less bullish view on hiking interest rates compared to the other G10 currencies who are battling inflation it has seen the dollar fall back.
Data shows that US Inflation had its smallest increase in a year, and today showed that US Consumer Prices barely rose in November as the cost of fuel and used cars reduced.
When the data kicked into the markets, both the pound and the Euro rose to 1.2445 and 1.0673 respectively against the dollar, the highest rate since the beginning of June.
The pound was also boosted by higher than expected wage increases in Britain which will now push the BOE into potentially hiking rates by 0.75% instead of 0.5% expected.
Yesterday saw EU Energy Ministers fail to strike a deal on a bloc-wide cap on natural gas prices, after months of debate over whether the measure can ease Europe’s energy crisis.
The president of the European Parliament has warned that ‘European Democracy is under attack’ following allegations that Qatar bribed EU officials to win influence. Belgian police have arrested four people including European Vice President Eva Kaili, and charged them with Corruption and money laundering. Police seized cash to the value of €600,000 EUR as well as computers and mobile phones.
GBPUSD resides at 1.2365
GBPEUR resides at 1.1628
EURUSD resides at 1.063
