GBP/USD: UK imposes new restrictions and BoE may slow interest rate hikes
Pound sterling fell yesterday to a new yearly low of 1.3160 after Prime Minister Boris Johnson enacted a “Plan B” that includes advice to work from home and the use vaccination certificates for large-volume events. The announcement comes after the number of reported cases of Covid-19 this week rose to the highest since January, with 568 cases of the Omicron variant reported in the UK so far already. The resurgence of the virus ahead the December 16 meeting of the Bank of England (BoE) means there is a high possibility that the central bank will keep interest rates on hold. BoE policymaker Michael Saunders, who voted to raise interest rates at last month’s meeting, said on Friday he would like to wait for more information on the impact of the omicron strain before deciding to vote at next week’s meeting. Read more...
GBP/USD Outlook: Bears are still in control, await US CPI before the next leg down
The GBP/USD pair struggled to capitalize on the overnight bounce from a one-year low and oscillated in a narrow trading band, around the 1.3200 mark through the early European session, on Thursday. The imposition of tougher COVID-19 restrictions in England turned out to be a key factor that acted as a headwind for the British pound. The UK Prime Minister Boris Johnson ordered people to work from home on Wednesday, wear face masks in public places and use vaccine passes to slow the spread of the Omicron variant of the coronavirus. This, along with persistent Brexit-related uncertainties, forced investors to scale back their bets for an imminent interest rate hike by the Bank of England in December. Apart from this, a modest pickup in US dollar demand kept a lid on any meaningful upside for the major. Read more...
GBP/USD Price Analysis: Downside remains open towards 1.3100 amid Omicron risks
GBP/USD is trading mildly offered around 1.3200, unable to find its feet amid persistent concerns over the rising Omicron cases in the UK and resurgent US dollar demand.
The Plan B guidance announced by the UK PM Boris Johnson on Wednesday has pushed back the Bank of England (BOE) rate hike calls to February 2022, undermining the sentiment around the local currency.
Meanwhile, uncertainty over the new covid variant and its implications on the global economic growth keeps the investors on the edge, lifting the US dollar’s safe-haven appeal, which in turn weighs on cable. Read more...
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