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Looking back over the year

2022 proved to be another volatile year for the currency market. While we emerged from the other side of the Covid pandemic, the outbreak of the largest war in Europe since WW2 rocked the global economy.

The war in Ukraine exacerbated global inflationary pressures. Sparking a sharp rise in the cost of living and leading to a series of massive interest rate hikes from the major central banks.
2022’s key exchange rates*


GBP/EUR – €1.21

GBP/USD – $1.37

EUR/USD – $1.14


GBP/EUR – €1.11

GBP/USD – $1.07

EUR/USD – $0.95

*Please note the rates quoted are interbank. Get in touch or log in to your online account to check live rates.

What happened in 2022?

The lifting of Covid restrictions by most major economies looked to be a positive sign for global growth in 2022. However, Vladimir Putin’s invasion of Ukraine at the end of February almost immediately derailed things.

The outbreak of the war in Ukraine weighed heavily on the euro in the first quarter, amid fears the Eurozone economy would be heavily impacted by the conflict and the sanctions imposed on Russia by Western powers. At the same time, the US dollar began what would be an extend bullish run through the majority of 2022 as jittery investors flocked to the safe-haven currency.

Rising inflation was already a point of concern for most major central banks before Russia’s invasion. But the war turbocharged these inflationary pressures as it triggered a dramatic increase in global energy prices.

As a result, 2022 was marked by a startling rise in consumer prices. While the US and Eurozone both experienced a sharp acceleration of inflation, the UK proved particularly vulnerable. Concerns over the UK’s cost of living crisis acted as a major headwind for the pound throughout much of the year.

In an effort to tame inflation, the Bank of England (BoE), European Central Bank (ECB) and Federal Reserve embarked on a new tightening cycle.

The Fed proved to be far more aggressive with its interest rate hikes than its peers, however. With a series of massive 75bps hikes helping to propel the US dollar to new multi-decade highs and even pushing the EUR/USD exchange rate below parity for a few months.

In addition to this, the prospect of much higher interest rates from the Fed, BoE and ECB fuelled global recession fears. Reinforcing the appeal of the safe-haven US dollar.

Meanwhile, political uncertainty in the UK proved a major source of volatility for the pound over the summer. After his administration being dogged by scandal for months, Boris Johnson resigned in July, to be replaced by Liz Truss in September following a lengthy leadership contest.

However, Truss’s ill-fated premiership proved even more volatile than her predecessor’s. Her plan for massive unfunded tax cuts spooked markets and saw the GBP/USD exchange rate collapse to a record low in late September.

Truss was forced to resign less than two months into her premiership. The appointment of Rishi Sunak as the UK’s latest Prime Minister then restored some of the UK’s fiscal credibility.

While this helped the Sterling to rebound from its worst levels the threat of a looming UK recession capped these gains. Particularly after the BoE warned the UK may be facing its longest downturn on record.

The end of the year saw the US dollar finally run out of steam, with signs that US inflation had peaked leading USD investors to reign in their Fed rate hike bets.

Dovish signals from the BoE acted as major headwind for the pound at the end of 2022. In contrast to a hawkish ECB, which helped the euro close the year on a positive note.

Need a chat about moving your money around? Contact Alastair on to find out more about  the latest news or how it could impact your currency transfers or your local agent Fiona on



Selling Your Property in France?

One key benefit for those who are selling and moving away from France is that Currencies Direct holds a euro account here in France. This makes life so much easier for anyone selling! You register with Currencies Direct, receive your CD account number and the RIB for their Paris based Euro account, which you pass on to your Notaire as your instruction for onforwarding of sale proceeds.

Currencies Direct receive the euros, convert at the agreed exchange rate and forward on to their destination bank account – wherever they are in the world. Simple, easy and very efficient…

Currencies Direct cite the example of a lady who has recently moved back to the UK – her funds are stuck in her French bank account who are insisting that she visits the branch in person to close her account but she is unwell and unable to travel.

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