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Market report


Monday 23rd May 2022

The optimism that is blowing through the markets this morning comes from the Chinese news. Shanghai is emerging from its restrictions and the unexpected drop in interest rates in China last week was seen as a signal that the authorities would support the recovery. The city of 25 million inhabitants plans to lift its lockdown and return to more normal life from June 1. As a result, the yuan had its best week since late 2020 last week and strengthened to 6.6844 per dollar on Monday. The US Dollar appears, for now, to be losing its bullish momentum following a small rally in US bonds that has dragged yields lower in recent sessions. The US dollar index, which rose about 16% to its highest level in two decades in the 12 months to mid-May, lost about 2% in one week. above its support at 102.24. The pound jumped nearly 2% last week on stronger than expected retail data as Bank of England governor Andrew Bailey is set to speak at the end of the day.  The safe-haven Swiss franc also advanced, retaining the strong gains made last week when it rose from parity with the dollar to around 0.9716 per dollar. The alpine country is set to host the second day of the Davos World Economic Forum today. Cable continued its way up Friday with slight gains as investors remain bullish about the US Dollar. GBPUSD opened at 1.2469 and close slightly under 1.2476. GBPEUR made gains Friday amidst better than expected results in retail. The pair opened at 1.1790 and closed at 1.1821 EURUSD closed the week with losses small losses as markets remain expectative of an ECB interest rates rise with the pair opening at 1.0572 and closing at 1.0561.