FX Navigator H1 2022
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.