Over this period GBP/EUR traded between 1.13 and 1.15, while EUR/GBP mostly held at around 0.87 only briefly falling to 0.86. At the same time, GBP/USD climbed to 1.26 before falling back to 1.24, while EUR/USD retreated from 1.10 to 1.08.

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.