Summary:
- The US Dollar strengthens as investors seek safer assets.
- EUR weakens against the GBP.
- USD/JPY showing mixed signals despite contrasting monetary policies.
- EUR/CHF currency pair reflecting mixed sentiment.
The US Dollar attracts risk averse investors.
The market sentiment for this currency pair has been showing bearish signals throughout the past week. Investor sentiment seems to be the main driver for the consistently decreasing price of the EUR/USD currency pair.
The hawkish Federal Reserve has investors turning to the greenback as a safety net against inflation and rising prices. This trend may be due for a slight change as investors expect the European Central Banks (ECB) to increase yields in the summer.
EUR/USD Price Chart
GBP Shows strength against the EUR
Market sentiment for this currency pair is showing bearish signals. The EUR is struggling against the Pound Sterling amidst rising gas prices increasing the likelihood of sending the European Union into a recession later in 2022.
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Fears of stagflation are causing investors, who are already risk-averse, to turn away from the Euro.The repricing of gas comes after Russia tightens gas supplies to the Eurozone in retaliation for sanctions.
EUR/GBP Price Chart
US Dollar and Japanese Yen
Market sentiment is mixed for this currency pair. With the Fed hiking interest rates to fight inflation and the Bank of Japan (BOJ) pumping stimulus into the in order to keep the 10 year government bond yield anchored, the contrast is what is driving the mixed sentiment for this pair.
USD/JPY Price Chart
Earlier on in the trading week the EUR managed to strengthen against the CHF - EUR/CHF currency pair
The market sentiment is showing mixed signals for the trading day today. Earlier on in the trading week the EUR managed to strengthen against the CHF, but the CHF has since gained some ground. Neither the ECB not the SNB have made moves to increase interest rates to fight inflation.
EUR/CHF Price Chart
Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
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