USA
US inflation numbers showed another sharp rise. Prices rose 6.8% on the year – the biggest increase for nearly four decades. Inflationary fears gave Gold and BTC a boost but, the Dollar remained strong against all other majors. The Federal Reserve chair Jerome Powell and US President Joe Binden both hinted towards bringing forward new monetary policies to tackle inflation sooner rather than later. Any pullbacks will likely be eaten up as the Dollar continues its uptrend but just how much further it will continue to rise without a correction remains to be seen.
GBP
Sterling continues its decline with another week of political scandals hitting the headlines in the UK. Public trust in the Gov is at an all-time low whilst the Prime Ministers behaviour may trigger a surprise leadership contest as early as next week. Scandals, Brexit and uncertainty over Omicron will likely prevent The Bank of England from raising rates, however, there still remains a chance. An increase in UK government bonds yields will attract inflows of foreign capital and give the Sterling a rise against the Dollar and Euro. A surprise hike is still in play.
EUR
Euro price weakness is likely to continue with Omicron, Vaccine Passports and protests turning violent on the continent. Even more ominous is the massive Russian military build up on the border of Ukraine. Any conflict between Russia and NATO will have a global impact but will hit the Euro significantly. The European Central Bank President Christine Lagarde is adamant that Eurozone inflation will be transitory and will not increase interest rates. This leaves the ECB at odds with the FED and could spell further downside for EUR/USD.