Euro tumbles to a 20-year low against the Dollar

GBP

The Bank of England has warned that Britain is likely to slip into a recession at the end of 2022 which will last until 2024, as soaring energy bills, mostly due to Russia’s invasion of Ukraine, could push consumer price inflation above 13% in October.

In exactly 14 days, the UK’s new prime minister will walk into Number 10 Downing Street to take office as the 56th prime minister of the UK and start their time at the helm of the country.

The Conservative Party membership, estimated to be around 160,000 – have until Friday 2 September to cast their votes with the winner to be announced at the 12.30 pm ceremony on Monday 5 September.

USD

The Dollar continued to hold the upper hand on the exchanges yesterday. This was against the backdrop of a distinctly risk-averse tone and the dollar safe haven appeal once again outweighed relative moves in interest rate differentials.

The Dollar’s ongoing dominance was evident in the EUR/USD pair testing below parity which continued overnight.

EUR

Business activity in the eurozone contracted for a second straight month in August as the cost of living crisis forced consumers to cut spending while supply constraints also hurt manufacturers.

S&P Global’s flash Composite Purchasing Managers’ Index (PMI) (seen as a good guide to overall economic health) fell to 49.2 in August from 49.9 in July.

A reading below 50 indicates a contraction and August’s preliminary estimate was the lowest since February 2021. 

If you or your company are impacted by currency risk please reach out to speak to one of our experts, we can assist with decision-making during this difficult time to help you protect your profits.