The pound continued to trade with considerable volatility over the past fortnight amid fiscal and political uncertainty in the UK.
During these eventful couple of weeks, we have seen GBP/EUR rebound from 1.13 to 1.16, while EUR/GBP retreated from 0.87 to 0.86.
Meanwhile, GBP/USD rallied from 1.10 to around 1.13, while EUR/USD ticked up from 0.97 to 0.98.
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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…
What’s been happening?
Trade in the pound has been extremely choppy over the past couple of weeks, with the scrapping of most of the disastrous mini-budget and the resignation of Liz Truss injecting volatility into Sterling.
The euro, meanwhile, has been repeatedly undermined by Ukraine concerns, with EUR investors fearing an escalation of the war could place further pressure on the Eurozone economy.
At the same time, the US dollar’s recent strength has been tested by a modest improvement in market risk appetite as well as a repricing of Federal Reserve rate hike expectations.
What do you need to look out for?
Over the next couple of weeks we may see UK political developments remain a key risk for the pound, while an oversized interest rate hike from the Bank of England could also infuse volatility into GBP exchange rates.
In the meantime, the European Central Bank’s impending interest rate decision will be in the spotlight. Another 75bps rate hike is already priced in, but some hawkish forward guidance could help to underpin the euro.
Meanwhile, the US dollar could pare some of its recent losses if the latest domestic GDP figures report the US economy returned to growth in the third quarter.