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GBP drops further over poor risk sentiment

Thanim Islam
Thanim Islam 26 April 2022

GBP: In the absence of data, GBP correlated to risk

EUR: ECB now concerned with growth

USD Dollar supported further on safe haven flows


The pound continued its underperformance against most currencies yesterday with its correlation to risk also now a reason for the market to sell the pound off.

Concerns have been growing over worsening Covid-19 outbreaks in China and as a result we saw stock markets fall into the red, along with assets correlated to risk, such as the pound.

Overnight news that the Chinese government promised to offer more support to the economy amidst the outbreak has caused some calm in the markets, with GBP recovering slightly this morning.


Macron's win over the weekend did little to support the euro with the currency largely finishing lower across the board.

ECB member Panetta spoke more about global efforts to bring crypto assets into the regulatory purview than about monetary policy – clearly respecting Lagarde’s recent calls to refrain opinion.

ECB’s De Cos also spoke in the afternoon commenting that growth uncertainty could weigh on inflation – a potential shift from worrying about inflation to worrying about growth.


The dollar continued its recent strength on the back of safe haven buying given the worsening Covid-19 outbreak in China.

Added to the ever-increasing bets on three consecutive 50bps hikes in the coming months, the dollar remains well supported.

Durable goods orders are released this afternoon as well as consumer confidence figures.


BoC Governor Tiff Macklem reaffirmed that the Bank is likely to consider another 50bps hike in its June BoC meeting and also mentioned that further rate hikes seem likely. A slight change in his stance last week when there was a brief mention that we could see a 75bps hike in June but the Canadian dollar still remains well supported. BoC deputy Lane will be speaking this afternoon.

Market rates 

Today's Interbank Rates at 09:07am against sterling movement vs yesterday.



US dollar


Australian dollar


South African rand


Japanese yen 


Have a great day.