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
Trading in financial instruments may involve a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both loss and profit. Investors should carefully consider whether financial instruments suit their needs, financial resources and personal circumstances.
The information contained in this material is solely for informational purposes only and it is not and should not be construed as an offer or a solicitation of an offer to buy or sell any financial instruments and cannot be relied upon as a representation that any particular transaction necessarily could have been or can be effected at the stated prices. This material does not contrue advice.
For more analysis on FX markets or information regarding SVB's FX services:
0800 023 1440 from within the UK
+44 207 367 7880 from overseas
See all of SVB's latest FX information and commentary.
By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.
Thank you for subscribing to SVB's Daily FX Update.
You're almost done. Please check your email box and follow the instructions to confirm your subscription. If you did not receive an email please check your Spam or Bulk E-Mail folder just in case the confirmation email got delivered there instead of your inbox. If so, select the confirmation message and mark it Not Spam, which should allow future messages to get through. Please add us to your trusted list of senders, contacts or address book.
Please note that we will continue to send you communications that we need to send you (for example, to keep you updated on operational changes to your account, a product or a service) or that we are required to send you by law.
© 2022 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB).
Silicon Valley Bank is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the California Department of Business Oversight and the United States Federal Reserve Bank; authorised by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Silicon Valley Bank is a subsidiary of SVB Financial Group, a Delaware corporation and is an affiliate of SVB Financial Group UK Limited. SVB Financial Group UK Ltd is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. 5572575 and is authorised and regulated by the Financial Conduct Authority, with reference number 446159. SVB Financial Group and its subsidiary Silicon Valley Bank are members of the Federal Reserve System and Silicon Valley Bank is a member of the FDIC.
Your eligible deposits with Silicon Valley Bank UK are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit http://www.fscs.org.uk. For more detailed information about coverage and limits, please review our FSCS Information Sheet at http://www.fscs.org.uk.
This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. Opinions expressed are our opinions as of the date of this content only. The material is based upon information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such.