Currency outlook: US dollar slumps amid fading Fed rate hike bets, Euro underpinned by ECB interest rate speculation

decision will undoubtedly be the main focus for EUR investors over the coming month, the potential start of Ukraine’s long-rumoured spring offensive could also inject some volatility into the euro.

Pound

GBP/EUR: Unchanged at €1.13

GBP/USD: Up from $1.22 to $1.24

The pound wavered over the past month as mixed UK economic data and a fluctuating market mood left the currency to trade without a strong directional bias.

At the end of March Sterling zigzagged in response to hawkish comments from Bank of England (BoE) Governor Andrew Bailey and a cautious market mood.

Thin trading conditions due to the long Easter weekend then left the pound trapped in a narrow range at the start of April. Before GBP exchange rates stumbled after UK growth was revised lower in the first quarter.

The pound then spiked on the back of the UK’s latest consumer sale of Activision Blizzard’s Call of Duty to Microsoft.

The CMA halted the $69 billion (€63.2 billion) deal - the biggest deal ever in gaming - on the grounds this would hinder competition in cloud gaming.

The regulator said on April 26 that Microsoft’s pledge to allow leading cloud gaming platforms to access Activision’s multibillion-dollar Call of Duty franchise had not allayed its concerns.

The company remained fully committed to the acquisition and would appeal the decision, Microsoft president Brad Smith announced in a statement. Activision in turn said it would “work aggressively” with Microsoft to reverse the CMA’s decision.

“This was not the news we wanted,” Activision’s CEO Bobby Kotick told staff, “but it is far from the final word on this deal,” he added.

“We will reassess our growth plans for the UK,” the company said in a separate statement. “Global innovators large and small will take note that, despite all its rhetoric, the UK is clearly closed for business.” price index after reporting domestic inflation remained in double digits in March.

The hotter-than-expected inflation print cement expectations for a May rate hike from the BoE, while also prompting some analysts to speculate rates could rise as high as 5 per cent by the end of 2023.

Looking ahead, the BoE’s May policy meeting could trigger a sharp appreciation in the pound if the bank signals it needs to take more action to bring inflation under control.

US Dollar

USD/GBP: Down from $0.81 to $0.80

USD/EUR: Down from €0.92 to €0.91

The US dollar trended broadly lower over the past month as an improving market mood sapped the appeal of the safe-haven currency. USD was supressed as we entered April, as USD investors were split on whether the Federal Reserve would pursue another rate hike in May.

The US dollar continued to be