The pound has reached a 5-year high against the euro this morning. Euro weakness, brought about by the ongoing Ukraine conflict, as well as recovering bond yields caused sterling to strengthen.
However, in an extremely volatile geopolitical landscape, this strength could be short-lived.
The euro continues to struggle and respond to news from Eastern Europe. Reports this morning reveal that Russian forces have taken control of the city of Kherson, which is the first major city to fall into Russian hands.
Data released yesterday showed that eurozone inflation surged in February. The European Central Bank continue to face the difficult task of combating high inflation whilst supporting economic growth.
During his testimony to Congress yesterday, Federal Reserve Chair, Jerome Powell, indicated support for an interest rate hike at the central bank’s next meeting. His testimony will continue today.
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