The Pound stagnated, following the news that food inflation had hit a 15 year high.
Kantar released data on Tuesday morning which showed that UK food inflation climbed to 17.5% during March, adding an additional £837 to the average UK household’s grocery bill.
Due to the cost-of-living crisis embroiling the UK, sentiment seemed to wane towards Sterling as it demonstrated how badly UK consumers were being affected by inflation.
However, GBP may have been underpinned by hawkish remarks from Bank of England (BoE) speakers. On Monday evening, BoE Governor Andrew Bailey delivered a speech taken as hawkish to the London School of Economics.
He stated: ‘We must be very alert to any signs of persistent inflationary pressures and if they become evident, further monetary tightening would be required. What monetary policy must do is ensure that inflation that has come to us from abroad does not become lasting.
Because of this, GBP investors may be reassured over the security of the sector, preventing GBP from falling further against some of its peers.
The US Dollar (USD) weakened during Tuesday’s morning session, as an upbeat market mood prevented the haven currency from gaining much ground.
Risk appetite continued to return to investors as fears over further banking collapses appeared to continue easing amongst investors. The improving attitude towards the banking sector came after First Citizens acquired Silicon Valley Bank over the previous weekend, alleviating concerns over further collapses.