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Ukraine peace hopes reduce safe haven appeal

Ukraine peace hopes reduce safe haven appeal

After initially falling to 1.3050 Sterling recovered strongly against the dollar. Ukraine peace hopes reduced safe haven appeal and weakened the dollar and Sterling peaked just above 1.3150. The Pound was sold off each time it rallied as markets reduced expectations of the Bank of England raise interest rates substantially further.

UK mortgage approvals dropped slightly below expectations but consumer credit increased sharply with a stronger overall increase in consumer borrowing. The data didn’t boost the Pound as confidence in the economic outlook remained fragile. By close of business Sterling had dipped back below 1.3100 to the Dollar and the Euro posted sharp gains to 1.1800. Overnight,  BRC data recorded a 2.1% increase in shop prices in the year to March from 1.8% previously; the largest increase in over a decade.

Sterling opens just above 1.3100 on Wednesday ahead of further comments from The Bank of England’s Deputy Governor, Ben Broadbent.

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