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.
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
What’s been happening? The ECB’s decision to slow the pace of its interest rate hikes, sent a strong signal the bank is close to ending its hiking cycle, a move which has weighed heavily on the euro through the first half of May. Meanwhile, the pound looked to be going from strength-to-strength, hitting new multi-month highs against the euro and US dollar. Before the BoE’s rate decision and suggestion inflation will fall sharply from April, reversed Sterling’s fortunes. Finally, the US dollar also faced pressure due to a dovish interest rate hike from the Fed. Although USD exchange rates have since recovered as fresh turmoil in the US banking sector spooked markets and bolstered safe-haven demand.
What do you need to look out for?
The second half of May could see movement in the currency market be more data driven as investors seek to gauge the likelihood of the three central banks raising interest rates again in June.
At the same time, the start of Ukraine’s long-awaited spring offensive could drive movement in the currency market. Ukrainian successes could cheer market sentiment and buoy the euro.
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