Pound slides amid gloomy UK outlook
The past couple of weeks have been characterised by a downbeat market mood, which has been particularly painful for the pound.
The past couple of weeks have been characterised by a downbeat market mood, which has been particularly painful for the pound.
We witnessed some notable swings in the currency market over the past couple of weeks, as investors revised interest rate expectations for the Bank of England (BoE), European Central Bank (ECB) and Federal Reserve.
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The US dollar enjoyed strong support through the second half of May, with the safe-haven currency being propelled to multi-month highs amid a prevailing risk-off mood.
The latest interest rate decisions from the Bank of England (BoE), European Central Bank (ECB) and Federal Reserve have injected significant volatility into the currency market so far in May.
Central bank policy bets boost the euro and dent the US dollar – Central bank dynamics have driven the currency markets over the last fortnight.
After ending 2022 on the back foot, the US dollar starts 2023 with a bang. Soaring more than 1% as currency markets reopened after the new year.
Economic uncertainty has continued over the past fortnight, with recession fears and central bank dynamics causing turbulence in the currency market.
A slowdown in US inflation hammered the US dollar over the past two weeks, while prompting a risk-on rally in markets. However, downbeat economic and geopolitical news caused some turbulence.