Mitsubishi UFJ: Rising Energy Prices Could Pressure the Euro and Pound

According to Jin10, Mitsubishi UFJ analyst Derek Halpenny said in a report that the euro and pound could face downside risk if energy prices keep rising sharply and the conflict between the United States and Iran escalates further. He said higher natural gas prices would affect household income, which could weaken consumer spending and economic growth. Halpenny also said that although market expectations for future rate hikes by the Federal Reserve, the ECB, and the Bank of England are converging, investors may think the U.S. economy is better able to withstand potential monetary tightening.