The currency market has been infused with some notable volatility over the past couple of weeks, following Russia’s invasion of Ukraine.
This has seen GBP/EUR climb from 1.19 to 1.20, whilst pushing EUR/GBP down to 0.82.
Meanwhile, GBP/USD has plummeted from 1.35 to 1.31, whilst EUR/USD collapsed from 1.13 to 1.08.
War in Ukraine rocks currency markets
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…
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What’s been happening?
The outbreak of war in Eastern Europe has unsurprisingly rattled EUR investors, with a clear euro selling bias emerging amidst fears over the vulnerability of the Eurozone economy to the conflict.
The pound has also suffered as a result of the Ukraine crisis, as the war with Russia looks set to stoke inflationary pressures in the UK at a time when consumers are already facing a cost-of-living crisis.
Meanwhile, the US dollar has benefitted from considerable risk-off flows over the past couple of weeks, in addition to Federal Reserve interest rate hike expectations.
What do you need to look out for?
Given the situation in Ukraine, the current market conditions are highly unpredictable, but so long as the conflict continues to intensify it seems safe to assume the euro will remain susceptible to further losses.
The direction of the pound over the next couple of weeks will largely depend on the Bank of England (BoE) as a cautious outlook from the bank at its March policy meeting could remove a key pillar of support for Sterling.
Finally the US dollar looks to go from strength to strength as safe-haven demand and an expected rate hike from the Fed look to underpin USD exchange rates.
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