Daily Market Update 14/04/2022

 Markets

GBP

Following an early dip to over a one-month low, the EUR/GBP cross attracted some intraday buying on Thursday, though the attempted recovery lacked bullish conviction. The shared currency’s relative outperformance lacked any obvious fundamental catalyst and could be solely attributed to some repositioning trade ahead of the European Central Bank meeting.



Given that the ECB is now more concerned with inflation than growth, it is expected to continue the process of policy normalisation unless the economic situation deteriorates significantly. The central bank has the choice to end the Quantitative Easing (QE) program immediately or shift guidance to suggest that interest rates could increase as QE is unwound.

That said, concerns about the potential economic fallout from the Ukraine crisis could hold back the ECB from announcing any major changes to its monetary policy settings. Apart from this, some follow-through buying around the British pound, bolstered by the ongoing US dollar retracement slide, acted as a headwind for the EUR/GBP cross and capped any meaningful upside.

EUR

Euro boom? The old continent is seeing higher inflation, which is why the European Central Bank is set to tighten its policy and boost the currency – but the only booms are not economic, but those of Russian shells in Ukrainian cities. And that is a reason to fade any upward EUR/USD move.

Prices are rising all over the world, hitting Spain the hardest with a whopping 9.8% YoY advance, and also rising quickly in Germany, historically anxious about increases in prices. At 7.6%, the continent’s largest economy’s inflation rate is a tad higher than the eurozone level of 7.5% – and both are far above the ECB’s target of 2% annual inflation.

USD

US markets opened lower after the latest US PPI numbers showed inflation in the US economy appears to be nowhere near close to peaking, although in the bond market yields fell back.

After US CPI hit its highest level since 1981 at 8.5% in March, in figures released Tuesday, there was some straw clutching going on that perhaps we might be nearing a peak in inflationary pressures in the US economy.

FX Street Morning Report- 14th April 2022

Today’s Rates

GBP>EUR – 1.2038

GBP>USD – 1.3135

EUR>USD – 1.0909

GBP>CAD – 1.6492

GBP>AUD – 1.7638

GBP>SEK – 12.413

GBP>AED – 4.8249

GBP>HKD – 10.299

GBP>ZAR – 19.236

GBP>CHF – 1.2275

  Today’s Calendar           

·       EUR      ECB Deposit Rate Decision

·       EUR      ECB Interest Rate Decision

·       EUR      ECB Monetary Policy Decision Statement

·       USD      Retail Sales (MoM)(Mar)

·       USD      Retail Sales Control Group(Mar)

·                    EUR      ECB Press Conference

·      USD      Michigan Consumer Sentiment Index(Apr)

   (https://frank-exchange.com/)

This document has been prepared solely for information and is not intended as an Inducement concerning the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited/Manor House Foreign eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result. Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.

Tags:

Looking for a money transfer service? Request for a call today!

Leave a Reply

Your email address will not be published.