Global stocks rally and the Dollar declines as concerns over the severity of the Omicron variant ease. Sterling gains as traders increase bets on BoE rate hikes into 2022.
December 23, 2021
GBP/USD 1.3385 GBP/EUR 1.1826 EUR/USD 1.1316 USD/CAD 1.2824 EUR/CHF 1.0425 EUR/SEK 10.3167 EUR/NOK 10.0553 EUR/DKK 7.4359 USD/ILS 3.1470 AUD/USD 0.7238 NZD/USD 0.6830 USD/SGD 1.3603 USD/JPY 114.31 USD/CNH 6.3762 USD/INR 75.2850 EUR/ILS 3.5612 GBP/ILS 4.2088 USD/ZAR 15.7819
GBPUSD has continued its upward trend, adding a further 0.2% this morning to trade at one-month highs. A weaker dollar acted as the catalyst, but sterling was buoyed by traders betting that the Bank of England will raise interest rates above 1% by the end of 2022, the first time they would be at such a level since 2009. Sterling has edged higher against a number of major currencies in the week so far, with GBPEUR up 0.15% this morning and GBPJPY posting the biggest gains.
The UK recorded over 100,000 daily Covid cases yesterday for the first time since the pandemic began. Reports show that the Omicron variant appears to be more mild than the previous dominant Delta strain.EUR
French officials have confirmed that a meeting will take place on January 4th, to decide what legal steps may need to be taken against the UK in regards to the ongoing fishing dispute. A court will review the matter, and the UK may face retaliatory measures such as customs tariffs, if they rule that the UK has not respected the post-Brexit accord.
EURUSD made the most of broad dollar weakness yesterday, climbing over 0.5% towards the key 1.1350 level of resistance. The pair has consolidated slightly on European open, down 20pips . European stocks gained as concerns over the severity of the Omicron variant eased.USD
The Dollar stalled yesterday as global risk appetite continued to improve. The DXY has continued to test the key support level below 96, down 0.55% on the week. Stocks advanced with the S&P 500 closing at record highs, up 1% on the day.
GDP for Q3 beat expectations, printing at 2.3% against forecasts of 2.1%. Despite rising Covid cases, Consumer Confidence improved on the previous month, beating forecasts to print at 115.8.ASIA/PACIFIC
Stocks advanced during the Asian session, with gains on the Japanese shares boosting the MSCI APAC index for a third consecutive day. The Nikkei and Topix climbed 0.83% and 0.91% respectively.
The Australian and Kiwi Dollars edged higher as risk sentiment improved. Emerging currencies also gained, with the MSCI index positing its biggest daily gain in two weeks. The Turkish Lira continued its rally, posting net gains on the Dollar for the fourth straight session.ILS
USDILS is up 0.8% higher on the week, with the pair continuing to trade within a narrow range between 3.1500 and 3.1700.Data & EventsUS - Continuing and Initial jobless claims
Core PCE Price Index
Durable Goods Orders
Michigan Consumer Sentiment
Germany - Import Prices
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