Sterling remained steady on Tuesday as Boris Johnson announced that there is not “enough evidence to justify any tougher measures before Christmas”. The British Prime Minister said that the government will “continue to monitor Omicron very closely” and if the situation deteriorates “will not hesitate to act after Christmas if necessary”. The Pound reacted well to the Johnson’s announcement for obvious reasons but will remain under pressure as the threat of Omicron persists and infections continue to rise.
GBPUSD started the session yesterday at 1.3239 and edged closer to 1.3250 by the close, finishing the day at 1.3247.
GBPEUR also made an improvement on Tuesday. The pair opened at 1.1715 and finished 40 pips above at 1.1757.
EURUSD in contrast suffered significant downside pressures yesterday as a stronger Dollar capitalized on a weak Euro. The pair started the session at 1.1301 and closed at 1.1268.
The US Dollar was able to gain some upside on Tuesday “as traders focused on optimistic economic conditions despite the rapidly spreading Omicron variant of the coronavirus”. The benchmark 10-year note was up 5.6 basis points yesterday reaching as high as 1.4754%. This “move marked a reversal of sentiment from Monday, when the yield on the benchmark 10-year note fell as far as 1.353%, the lowest since Dec. 3”.
On the data front, at 07:00 the UK released its Final Q3 GDP Growth Rate YoY, printing an actual reading of 6.8%. Across the pond this afternoon, the US will also release it Final Q3 GDP Growth Rate YoY, forecasted at 2.1% with a previous of 6.7%. At the same time, November’s Chicago Fed National Activity Index will be released, followed by Core PCE Prices and Existing Home Sales.