Sterling was hampered by further difficulties for Prime Minister Johnson and the government [Video]

Global risk appetite has been mixed with uncertainty and conflicting reports surrounding the Omicron variant.

The dollar failed to benefit from firm data or higher yields and posted significant losses on the day. The Euro was resilient and EUR/USD advanced to 1.1350 on short covering before fading slightly. Sterling was undermined by a tightening of coronavirus restrictions, but GBP/USD recovered from fresh 2021 lows.

The Euro drifted lower into Wednesday’s New York open with a EUR/USD retreat towards 1.1270, although there was choppy trading with fluctuations in risk appetite as markets continued to monitor global coronavirus developments. Caution ahead of forthcoming policy meetings also curbed aggressive position taking.

There were expectations that the Federal Reserve would take a hawkish stance at next week’s policy meeting and potentially sanction a faster rate of stimulus withdrawal by accelerating the rate of tapering of bond purchases. Markets will also be monitoring rhetoric surrounding interest rates within the statement.

Sterling was unable to make any headway in early Europe on Wednesday and gradually lost ground ahead of the New York open. Risk appetite dipped on renewed reservations over coronavirus developments although, significantly, the Pound failed to recover when risk conditions improved once again.

Sterling was hampered by further difficulties for Prime Minister Johnson and the government. There were also media reports that the government will introduce fresh restrictions in order to curb spread of the Omicron variant which would further damage the outlook.

Sentiment remained fragile and the government confirmed that there would be a move to Plan B restrictions in England with a renewed directive to work from home if possible. The UK currency was unable to make headway on Thursday and GBP/USD traded only marginally above 1.32.

Trading carries a high level of risk to your capital. Losses can exceed deposits. Please read the full risk warning here.Trading spot foreign exchange and futures on margin carries a high level of risk and may not be suitable for all investors. You may lose all your capital. Loses can exceed deposits. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in spot foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. If you are in any doubt about investment or the mechanics of such products, you should seek independent financial advice

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD accelerates slump, approaches 0.1300

The shared currency is among the weakest dollar’s rivals. EUR/USD trades around 1.1320 and is near its weekly low. Elsewhere, the greenback weakened after soft US employment-related figures and as stocks rallied.


GBP/USD holds above 1.3600 as dollar fails to capitalize on US data

GBP/USD tested 1.3600 earlier in the day but managed to stage a recovery in the early American session. The greenback is having a hard time gathering strength as investors assess the mixed macroeconomic data releases from the US.


Gold bulls looking for a re-test of November high at 1,877.15

Gold resumed its advance after a short-lived consolidative stage, reaching a fresh two-month high of $1,847.92 a troy ounce. The dollar came under renewed selling pressure after the US released mixed economic figures.

Gold News

Decentraland holds support but MANA may return to $2

Decentraland price action is, at present, very indecisive. However, while the overall outlook is bearish – especially within the Ichimoku Kinko Hyo system, there is evidence that a turnaround to the upside may be coming soon.

Read more

When real rates are negative for a sustained period, is it a sign of looming recession?

We agree that inflation should moderate this year due to the money side of things, but worry that monetary policy is powerless against most of the supply chain issues, commodity prices, greedy consumer goods companies, and that weird labor shortage.

Read more