UK and European markets search for direction

Chris Beauchamp IG

UK and European investors are twiddling their thumbs today, and what little risk appetite there is has ebbed away this afternoon, says Chris Beauchamp, chief market analyst at online trading platform IG.

European markets drift sideways

“Earlier gains for European indices have been chipped away this afternoon, as concerns about interest rates and the ongoing Ukraine conflict sapped risk appetite. The past month has seen a dramatic repricing of expectations around interest rates. Previously, markets had seen cautiously optimistic that the end of the surge to tighten rates was upon us. Stronger data from various quarters has reversed that view entirely.”

Biden’s visit to Kyiv highlights ongoing conflict

“As if this renewed hawkish view wasn’t enough, President Biden’s unexpected visit to Kyiv reminds us that the standoff between Russia and the West over Ukraine is likely to be a semi-permanent feature. And any hope of some positive news in the talks between the UK and Europe over changes to the Protocol have been dashed, as a brewing Tory rebellion threatens to undermine Sunak’s leadership."

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Chris Beauchamp

EUR/USD turns negative near 1.1850

EUR/USD has given up its earlier intraday gains on Thursday and is now struggling to hold above the 1.1850 area. The US Dollar is finding renewed support from a pick-up in risk aversion, while fresh market chatter suggesting Russia could be considering a return to the US Dollar system is also lending the Greenback an extra boost.

GBP/USD change course, nears 1.3600

GBP/USD gives away its daily gains and recedes toward the low-1.3600s on Thursday. Indeed, Cable now struggles to regain some upside traction on the back of the sudden bout of buying interest in the Greenback. In the meantime, investors continue to assess a string of underwhelming UK data releases released earlier in the day.