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Geopolitical Tension To Keep Markets Volatile

Geopolitical Tension To Keep Markets Volatile

The Pound to Euro exchange rate may look to cement its recovery of the 1.19 handle over the coming days, although with developments around Ukraine dominating headlines and January’s inflation data looming, the risk may be on the upside for Sterling.

Sterling’s early February decline against the single currency was arrested by dip-buyers just above the 1.18 handle last week, enabling it to pick up from earlier losses as Friday’s rally lifted the Pound more than 100 points against the Euro to circa 1.1950 in time for the weekend close.

In level terms, EUR/USD opens this morning just above the 1.13 mark with GBP/USD dropping to 1.35. After Friday’s move higher, GBP/EUR trades just shy of the 1.1950 having spent most of last week between 1.18 -1.1850. 

Datawise, a busy diary in the US and UK with UK CPI data and the Fed meeting minutes being watched. Both releases have the potential for some impact on their respective currencies. Meanwhile, the Eurozone schedule appears much quieter. Aside from the macro diary, markets will be watching developments in Ukraine. 

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