By Tom Arnold
Last week’s currency market movement was massively dominated by the terrible events unfolding in Ukraine. Whenever there is a major global crisis the US Dollar strengthens significantly as large scale investors more into the Dollar to take advantage of its safe-haven status. As a result, over the course of the last few days we have seen the US Dollar make multi-cent gains against both the Pound and the Euro.
The US Dollar gained additional support last Friday with a massive number of 678,000 new jobs created as announced in the Non-Farm Payroll release. This is a phenomenal result for the US economy and gave the Dollar even further impetus.
Sadly, for the Euro, a strong Dollar almost inevitably leads to weakness for the single currency, with the other major global currency also more vulnerable to the Ukraine situation unfolding on its doorstep. Sterling has managed to hit highs against the Euro not seen since before the 2016 Brexit referendum, giving a great opportunity to those looking to buy a property in Europe.
The week ahead is a busy one with some critical data releases – EU and UK GDP, the EU interest rate decision and US CPI inflation being the main announcements to watch for later in the week.
German Retail Sales
UK Retail Sales
US Trade Balance
Australian Consumer Confidence
UK Budget Report
EU ECB Interest Rate Decision and Monthly Policy Statement
EU ECB Press Conference
US CPI Inflation
US Initial Jobless Claims