USD Weakness and Central Bank Moves Drive Volatility

Market volatility has continued this morning session, with down-side pressure on the USD – that both GBP and EUR took advantages off. The USD weakness happened after Donald Trump held a press conference discuss his view on both interest rate levels and oil prices. He stated that interest rates levels should come down immediately in the US and that this should be followed suit worldwide. Donald Trump also urged OPEC and oil producing countries to lower their price levels – which he believes would halt the conflict between Ukraine and Russia. Indicating that Russia relies on exporting oil and energy which would cause a slowdown to their finances for military actions.  Since the comments from the new elected president of United States – GBP/EUR gained roughly half a percent, while EUR/USD has taken slightly more advantages and was up almost three quarters of a percent.

Even if markets had priced in a rate hike of 25 basis points from Bank of Japan this early morning, it’s contributed to market fluctuations after BoJ announced their quarterly outlook. The report advocates that there will be further rate hikes taken place from the central bank sooner than markets had predicted, now indicating a next hike to take place in May. With wage negotiations taken place in Spring, end of financial year – should give us a stronger indication of BoJ’s next steps. Inflation also jumped in December to 3.6%, with utilities and fresh food prices being the two strongest contributors.

GBP/EUR 1.1831 GBP/USD 1.2420 GBP/AED 4.5662
GBP/AUD 1.9655 GBP/CHF 1.1225 GBP/CAD 1.7806
GBP/NZD 2.1747 EUR/USD 1.0488 GBP/ZAR 22.7989

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