RationalFX: Sterling has held onto recent gains as the spread of the Omicron variant continues to hinder the pace at which the global economy can recover from the Coronavirus pandemic.
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RationalFX
GBP
After the Bank of England’s decision to raise interest rates, the pound ended the year 2021 in positive territory and remains trading strong against most majors. The stand out for sterling would be the five weeks consecutive gain against the euro and may even break the 1.20 resistance level this week.
Although fundamental factors continue to drive risk sentiment, a high vaccination rate in the United Kingdom combined with higher rates has supported GBP/USD.
USD
Last Friday we also had the release of Non-Farm Payroll data for December coming in at 199k new jobs with the expected number to be 400k new jobs. The unemployment rate improved to 3.9% from 4.1%, its best level since February 2020. In addition, Average Hourly Earnings increased by 0.6% vs 0.4% expected and 0.4% in November. This tied the highest level since April 2021 as employers paid higher wages to fill job vacancies.
This release may have carried a bit of extra importance after the December FOMC rate decision. At that meeting, Fed Chair Powell said that the FOMC was opening the door to tighter policy options in 2022, largely in response to the persistent inflation that continues to run through the US economy.
Key announcements
10:00 – EUR – Unemployment data expected 7.2
Source : ETFWorld.co.uk
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