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Stock markets and risk assets generally posted impressive moves last week, discounting the impact of the Russian invasion of Ukraine and treating Fed hawkishness as a case of "buy the rumour, sell the news".

Sterling fell against its peers after Thursday’s Bank of England announcement was much more dovish than the market had anticipated.

Thursday's Bank of England announcement was much more dovish than we had anticipated.

The Federal Reserve raised interest rates for the first time in the pandemic era on Wednesday, while materially upgrading its expectations for both inflation and interest rates in 2022.

Risk sentiment was buffeted in both directions on Tuesday, leading to a relatively volatile trading day for most currencies.

The Bank of England is poised to raise interest rates for the third consecutive meeting on Thursday, as it continues its battle to rein in surging UK inflation.

The Federal Reserve looks set to raise interest rates for the first time since the onset of the COVID-19 pandemic on Wednesday, with uncertainty surrounding the future path of hikes ensuring that this week's meeting will likely be a highly important one.

The ECB's unambiguously hawkish messaging last week did not stop the euro from sinking to new lows as concerns mount over stagflation or worse.

The euro briefly rallied against its peers on Thursday after the European Central Bank announced that it was winding down its asset purchase programme faster than originally anticipated, despite the downside risks to growth posed by Russia’s invasion of Ukraine.

Most risk currencies rallied on Wednesday, as an easing in commodity prices allayed global growth fears and buoyed risk sentiment in financial markets.