Pound US Dollar (GBP/USD) Exchange Rate Boosted amid Market Correction
The Pound US Dollar (GBP/USD) exchange rate is making gains today despite there being no clear catalyst for the movement. The Pound (GBP) may be seeing a technical correction following a slump last week after the Bank of England’s (BoE) interest rate decision. Additionally, an uptick to UK bond yields may also be helping GBP to climb.
At time of writing the GBP/USD exchange is at around $1.1399, which is up roughly 0.3% from this morning’s opening figures.
Pound (GBP) Gains as Russia-Ukraine Peace Talks Continue
The Pound (GBP) is climbing against many of its safer rivals today. A possible return of global risk appetite may be helping Sterling to climb today amid the war in Ukraine. Additionally, the currency may be seeing a technical correction after GBP fell following the BoE’s interest rate decision last week. This could also have prompted today’s rise to UK bond yields.
Despite fresh Russian attacks, some optimism over diplomatic efforts remains which may be pushing Sterling higher. Ukraine’s President Volodymyr Zelenskiy stated that negotiators needed to use ‘any format’ in order to further the peace talks.
Zelenskiy issued a dire warning should these negotiations fail:
‘But if these attempts fail, that would mean that this is a third world war.’
Officials in Turkey have said that Russia and Ukraine were getting closer to an agreement on key issues.
US Dollar (USD) Dips ahead of Powell Speech
The US Dollar (USD) is sliding against its competitors today. Bets on USD may be limited ahead of a speech Fed Chair Jerome Powell following the central bank’s interest rate decision last week. Reports of fresh attacks on the Ukrainian coastal city of Odesa may also be spurring increased bets on the safe-haven ‘Greenback’.
The Federal Reserve announced an interest rate hike of 0.25% on Wednesday in the face of soaring inflation. Earlier today however, Fed board member Raphael Bostic stated market uncertainty has ‘tempered my confidence that an extremely aggressive rate path is appropriate today’. This may be weighing upon USD today.
Significant losses for the US Dollar could be limited today as Russian forces step up attacks on major Ukrainian cities. Ukrainian officials reported earlier that Russian naval forces had shelled residential buildings on the outskirts of Odesa on Monday. The city has been blockaded by the Russian navy since the start of the invasion.