Concern for Sterling as Dollar Triumphs
As we continue a tumultuous week on the currency markets the dollar keeps the upper hand, making further gains against the euro, sterling and even yen. This saw EUR/USD tumbe to its lowest level so far this year, into the $1.15 mark. The mixed opinions regarding the interest rate outlook have further helped the dollar against the euro and yen.
Here in the UK, concerns of acute supply shortages in the UK continues to have a downward impact on sterling. Yesterday evening, a discussion on monetary policy was held by the Heads of the Central Bank’s in the main advanced economies, but this had little impact on currency markets.
As we look ahead to today, the greenback is still king with EUR/USD trading around the $1.16 mark. GBP/USD is down at the midpoint of $1.34-1.35, despite having started yesterday above $1.35. EUR/GBP remains in the bottom half of 86-87p. The Eurozone unemployment rate is the main data highlight for today and is forecast to continue to fall slightly lower to 7.5%. However, within the bigger picture, the release is unlikely to have any major impact.