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USD remains strong as EUR and GBP struggle

USD remains strong as EUR and GBP struggle

Yesterday saw traders remain in a generally cautious mood, with concerns about the interest rate/inflation outlook, war in Ukraine and the Covid situation in China all taking their toll. Safe-haven currencies such as the dollar continued to hold the upper hand on currency markets. At the same time, the euro was on the back foot on the exchanges as concerns grow over the war in Ukraine and the political and energy supply uncertainties that brings.

Figures wise, this translated into EUR/USD falling to a new 5-year trough below the $1.06 threshold, and in overnight action, the pair fell to a low of $1.048. It opens this morning down near to $1.05. The euro also lost ground to sterling, reflected in EUR/GBP unable to hold onto its position in 84p territory, the pair starts this morning at 83.9p. GBP/USD has continued to trend lower over the past 24 hours. It is changing hands at $1.252. Elsewhere, the yen remains under pressure after the BoJ re-emphasised its commitment to its low interest rate strategy – USD/JPY is up at ¥130, for the first time since April 2002. 

As we look ahead to today’s dairy the greenback is the talking point once again with  US Q1 GDP, with growth expected to slow sharply to 1.1% in annualised terms (from 6.9%). US Core PCE inflation for Q1 is also due. The Eurozone EC sentiment indices and German inflation (both April) are the other key highlights.

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