Financial markets encountered significant volatility yesterday as equities from around the globe plunged. Both European and US stocks lead the charge lower which saw a strong impact on the FX space. The pound ended up as one of the weakest currencies on the day, seeing a 1.2% pullback, its worst fall since September 2020. The euro also fell but its losses were capped. This pushed the GBPEUR rate below the €1.16 handle.
Wednesday’s session will no doubt be a tense one as participants attempt to gauge if risk-off remains the order of the day. On the economic calendar, we have appearances from 3 major central bank bosses which could add fuel to the fire. Between inflation fears, global supply chain issues, and concern over monetary policy tightening, markets have a lot to contend with. As such, central bankers may continue with their usual tact and provide reassurance and an accommodative tone.
Written by Viv Savani. 6:25am, September 29th 2021
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