Bearish trading conditions and European energy concerns largely dictated currency movements in the second half of August, triggering the EUR/USD exchange rate’s drop below parity.
This saw GBP/EUR trade between 1.19 and 1.17, while EUR/GBP fluctuated between 0.84 and 0.85.
Meanwhile, GBP/USD slumped from 1.21 to 1.17, while EUR/USD retreated from 1.02 to 0.99.
EUR/USD sustains fall below parity amid European energy price crisis
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 euro has come under sustained selling pressure over the past couple of weeks. EUR investors have been spooked by a looming European energy price crisis and fears this could tip the Eurozone into a recession.
The pound also came under pressure as a result of recession fears. GBP investors have grown increasingly pessimistic regarding the UK’s economic outlook, amid widespread industrial action, a political power vacuum and rising cost of living.
Global recession fears helped to underpin the US dollar through the second half of August. Although the ‘greenback’s gains were tested by an abysmal PMI print and fluctuating expectations regarding the Federal Reserve’s next rate hike.
What do you need to look out for?
A key focus at the start of September will be the European Central Bank’s (ECB) latest interest rate decision. Reports suggest policymakers may be mulling a 75 basis point interest rate hike this month, which could bolster the euro.
For GBP investors the spotlight will be on the result of the Conservative leadership election. Uncertainty over Liz Truss’ controversial economic policies could lead the pound to weaken if she is confirmed as the next PM.
In the meantime, the publication of the latest US payrolls could drag on the US dollar. If the number of jobs added by the US economy fell sharply in August as forecast.