Cautious Sentiment Remains
The Pound to Euro exchange rate ended last week near to February highs after market concerns about developments in Ukraine weighed heavily on the European single currency. Markets are expected to remain choppy with bouts of volatility expected over the coming days.
With storm Eunice gripping much of the UK over the weekend, global markets are too facing strong winds as the geopolitical situation in Ukraine remains volatile. Diplomatic talks will continue into the week but with no resolution expected, this should maintain in the safe haven currencies like the USD, JPY and CHF.
In level terms, the EUR/USD pair spent most of the week within the 1.13-1.14 corridor. Elsewhere, GBP/EUR was confined to the 1.19-1.20 trading band with GBP/USD was for the most part changing hands in and around the 1.36 mark.
Looking ahead to this week, from a data viewpoint, the flash PMI’s from the US, Eurozone and UK are all due for release. One of the other key data highlights will be the core PCE measure (Fed’s preferred metric) of US inflation for January.