Sterling has continued Friday’s slide hitting it lowest level since September 2020 against the dollar and a one month low against the euro. Market worries that a raft of poor economic data may threaten the Bank of England’s rate hike prospects in the coming months are weighing heavy on the pound and Friday’s GfK economic sentiment survey which tumbled to its second lowest reading since records began 50 years ago, has heightened those fears. Despite this, the asking prices for homes in the UK continued their steady march upwards once again in April. Property search website Rightmove said asking prices rose by 1.6% this month, slowing slightly from 1.7% rise in March. The report echoed other gauges that show Britain’s housing market retained much of its momentum in the first half of 2022, despite the phasing out of temporary tax breaks on property purchases in the second half of 2021.


The euro failed to gain a boost against the dollar from Emmanuel Macron’s comfortable re-election as France’s president. Macron received a greater share of the vote than expected, winning 58.55% against far-right candidate Marine Le Pen’s 41.45% . The single currency initially opened higher on the news, before falling 0.3% against the broadly stronger dollar, weighed down on market risk-aversion and fears of how a likely European Union embargo on Russian oil imports would hurt the bloc’s economy. The Times reported this morning that the EU is preparing “smart sanctions” against Russian oil imports citing executive vice president Valdis Dombrovskis who said they were working on a sixth sanctions package and one of the issues they are considering is some form of an oil embargo.


The dollar continued to capitalise on Friday’s gains in early trading as the market sought the safe currency due to uncertainties over the global growth outlook. Today, Beijing began three rounds of Covid testing for all residents of its biggest district Chaoyang, prompting residents to stock up on food over fears of an eventual strict lockdown akin to Shanghai’s, the country’s financial hub. The dollar had already been in demand and surged to a 2-year high against its peers drawing support from Federal Reserve Bank Chairman’s Jerome Powell’s comments last week that seemed to back a 50-basis point interest rate hike at next month’s meeting.

Economic Calendar

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