FX Navigator H1 2022

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Key takeaways

Rounding off another eventful year for currencies globally, markets brace for a higher interest rate environment.


The Bank of England leads its peers in the race to hike interest rates

The BoE delivered its first interest rate increase since the pandemic in December 2021 and is expected to deliver 4 more this year, while the Federal Reserve is expected to deliver 3 or more. 


Excess inflation has negative impacts to currency strength in the long run

History shows that when economies are unable to get a handle on elevated inflation levels, their domestic currency suffers as a result. There is a fine balance between healthy inflation and too much.


Currency intervention is losing its impact

Central bank balance sheets are ballooning, yet the impact of intervention on currency strength is diminishing as markets focus turns to other factors in play.