Sterling gains as new fiscal support is announced for businesses effected by Omicron. Germany and Portugal become the latest European countries to announce Covid restrictions.
December 22, 2021
GBP/USD 1.3266 GBP/EUR 1.1767 EUR/USD 1.1272 USD/CAD 1.2905 EUR/CHF 1.0425 EUR/SEK 10.3065 EUR/NOK 10.0514 EUR/DKK 7.4361 USD/ILS 3.1660 AUD/USD 0.7149 NZD/USD 0.6764 USD/SGD 1.3660 USD/JPY 114.28 USD/CNH 6.3781 USD/INR 75.5750 EUR/ILS 3.5681 GBP/ILS 4.1978 USD/ZAR 15.8863
Sterling gained yesterday as Rishi Sunak announced new fiscal support for businesses effected by Omicron. The pound recovered its losses against both the Dollar and the Euro, as £683mio was made available for the hospitality and leisure sector. GBPUSD and GBPEUR both gained 0.5% throughout Tuesday.
Sterling sentiment was also boosted as Boris Johnson announced no new restrictions will be introduced before Christmas. Reports still suggest that circuit breaker measures may be introduced starting from December 28th. The UK economy grew at a slower pace than forecast for the third quarter, output printed at 1.1%, against expectations of 1.3%.EUR
EURUSD has bounced off the key 1.1300 level of resistance to trade 0.15% lower this morning, as ECB member Isabel Schnabel reconfirmed that policy normalisation will be gradual. She also reiterated the risks to the upside of the central banks higher inflation projections.
Germany and Portugal have become the newest European nations to introduce post-Christmas restrictions in a bid to control the spread of the Omicron variant. Measures include the limitation of socialising to 10 people, as well as the closure of some bars and nightclubs.USD
The Dollar struggled for demand yesterday, as global risk sentiment improved. The Dollar Spot index remains steady on the week around the 96.50 level, whilst treasury bond yields continued to trade just below the 1.5% area. US stocks futures trade relatively flat, with both the S&P 500 and Nasdaq dipping 0.1%.
Democrats will meet early next week after the holidays, in attempt to draw up a path for the future of Joe Biden’s Build Back Better economic agenda. Biden confirmed yesterday that he believes there is still a path for approval, after productive talks with Joe Manchin over the weekend.ASIA/PACIFIC
The Yen continues to trade lower against the Dollar as the Bank of Japan reiterate their dovish position. USDJPY trades 0.6% higher on the week so far, around 114.31.
The MSCI Asia Pacific Index rallied 0.2% as tech shares led gains, with the Hang Seng index surging 0.57%. Chinese Development shares jumped the most in a month yesterday, although reasons for the gains remain uncertain. The CSI 300 Real Estate index climbed 4.5%.ILSUSDILS continued its upward trend yesterday, trading 1% higher on the week. The pair prints at 3.1666 at time of writing.Data & Events
UK – GDP Growth Rate
Israel – Industrial Production
US - MBA Mortgage Applications
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