The pound has strengthened further against the euro and has climbed around 1.5% against the dollar due to a combination of the US Federal Reserve’s latest interest rate decision and gas worries in the eurozone.
Yesterday saw the Fed raise interest rates in the US by 75 basis points. While this was largely anticipated and priced in by markets, comments by Fed Chair Jerome Powell in the aftermath were less hawkish than expected, sending the dollar down.
In the eurozone, gas prices rose almost 2% and the euro slumped following news that Russia has followed through on its threats to restrict a key gas pipeline to Germany. The Nord Stream 1 pipeline is now running at less than 20% of its normal capacity resulting in Ukraine accusing Russia of a “gas war”.
Today, the key releases to look out for are inflation figures for Germany – which has been teetering on the brink of recession – and GDP figures and jobs data for the US.
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