empire state building

Volatility continues and dollar strengthens

Michael Rimmer
Michael Rimmer 08 March 2022

  • GBP: Moving as a byproduct in tumultuous markets
  • EUR: Euro weakens as gas price hike expected to hit the industry
  • USD: US dollar strengthens as safe haven currency


Sterling pushed on into the 1.21s against the euro yesterday morning as the Ukrainian situation continues to have wider ramifications on the markets. This was the strongest level since the referendum, although the move was reversed in the afternoon as GBP/EUR returned to the 1.20s.

In the FX markets, safe haven currencies such as the US dollar and Japanese Yen remain bid, as wheat and nickel futures jumped to record highs, along with oil testing the highest levels since 2008. As a result, GBP was at some of the weakest levels since November 2020 against the US dollar.

There is no data of note today.


The euro remains the whipping boy of the FX markets, due to its exposure to Russian oil and gas. Yesterday brent crude jumped to a 14-year high and European natural gas prices soared 80 per cent after the US said it was considering a ban on Russian oil imports.

Today the EU will outline a plan to cut Russian gas imports by two-thirds within a year as it seeks to cut its dependency on Russia. However, despite the group’s stance, there remains reluctance from Germany and the Netherlands. Yesterday German Chancellor Olaf Scholz indicated he was reluctant to ban Russian imports, specifically ones which were of “essential importance” to the EU. It will be interesting to see the alternative proposals, as the US weighs in on the matter. The higher prices will filter through to European inflation, which will put greater focus on the ECB on Thursday.

There is no data of note today.


The dollar's bull run continues as it was at its strongest levels since May 2020 and November 2020 against the euro and sterling respectively. As equities drop and the prices of commodities rise, the dollar is strongly correlated and continues to strengthen. The US Secretary of State Antony Blinken’s announcement over the weekend that Washington was discussing a ban on importing Russian oil has further fuelled the market’s growing concerns that there will be the worst stagflationary shock to hit energy importing economies since the 1970s. As long as this rhetoric and the market’s concerns continue, the dollar is expected to remain strong.

There is no data of note today.

Market rates

Today's Interbank Rates at 08:40am against sterling movement vs yesterday.

Euro €1.202 ↓
US dollar $1.311 ↓
Australian dollar $1.801 ↑
South African rand R20.05 ↓
Japanese Yen ¥151.5 -