At around this time last year I wrote an overview of one of the strangest years, in FX market terms, that most of us have ever experienced. This year I thought I would do the same to see how our fortunes have fared in post Brexit, post COVID-19 Britain … surely it all went away didn’t it?
As we moved into spring, the UK emerged as the leading vaccinator of the G20, with the EU only able to cry foul as it accused AstraZeneca of breaking contract. The result was that sterling strengthened across the board to 1.3865, with the single currency being hardest hit as it dropped to 1.1900 against the USD and 0.8500 against the GBP. At this time, the Federal Reserve Bank (Fed) was still only expected to raise interest rates in 2024, with full employment its ultimate goal.
Anyone with a crystal ball please step forward, but there are a few things on the horizon to keep an eye out for in 2022. Front and centre has to be interest rate movement. In the UK, expectations are that rates will continue to rise, beginning in February, with base rate set to hit 1% possibly as soon as May. There may be a pause to see what effects, if any, these increases have made or did the BoE leave rates too low for too long, meaning that it will be forced to go harder and higher. The US will be much in the same boat, however, the Fed’s directive is to ensure full employment, not to keep inflation low. That said, there has to be a point where the Fed has to act. Some think this will be sooner rather than later or the fact that inflation is ‘transitory’ could prove correct. Regardless, interest rate movement will probably have a major effect on exchange markets throughout 2022. In the EU, it has been well documented that the European Central Bank is not expected to look at any interest rate movement until 2023, despite signs inflation is beginning to heat up in the single market.
We welcome in the New Year and will be starting our commentaries again on Monday 10 January, and who knows what we will be commenting on in 2022.
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Brian is responsible for managing the foreign exchange book across the company’s international jurisdictions. As part of the treasury team, he works closely with our relationship managers to provide foreign exchange solutions for our clients.
Brian joined in December 2018 and has over 35 years’ financial markets experience, working for various global banking operations including Lloyds Bank Plc, Royal Bank of Canada and BNP Paribas.
Brian is a member of the Chartered Institute for Securities & Investment and holds the Investment Management Certificate and ACI Dealing Certificate.
Brian is responsible for managing the foreign exchange book across the company’s international jurisdictions. As part of the treasury team, he works closely with our relationship managers to provide foreign exchange solutions for our clients.
Brian joined in December 2018 and has over 35 years’ financial markets experience, working for various global banking operations including Lloyds Bank Plc, Royal Bank of Canada and BNP Paribas.
Brian is a member of the Chartered Institute for Securities & Investment and holds the Investment Management Certificate and ACI Dealing Certificate.
+44 (0)1534 823216
6 Dec
| 5 mins
Many see Christmas as a time for festivities, others as the time to file tax returns ahead of the 31 January deadline. But while you and Santa are making your lists, and checking them twice, Anna Slater highlights some pointers to help you with UK self-assessment submissions.
4 Mar
| 9 mins
It’s just a month to go until the UK tax year ends on 5 April. Ahead of that date, we would encourage you to review your finances, even if it’s just to double check. We detail some of the considerations we believe should be front of mind as we count down to the UK tax year end.
31 Jan
| 3½ mins
Most calendars start on 1 January and end on 31 December, but not the UK personal tax year. We explain the history behind the date as the government considers the pros and cons put forward by the Office for Tax Simplification with regard to changing the tax year end date.
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