Sterling exhibited impressive resilience on Tuesday to mark gains against both the Euro and Dollar. The demand for Sterling picked up yesterday when Prime Minister Boris Johnson said that the UK would look to “ride out” the new Omicron variant, as opposed to putting more restrictions in place or another lockdown. On Tuesday the UK recorded a further 218,724 COVID-19 cases and 48 COVID-related deaths. Despite appreciating that the government’s latest move could leave the NHS “temporarily overwhelmed”, Johnson said the U.K. must carry on “without shutting our country down again”. The PM added that while doing so many be “challenging”, the U.K. must keep its schools and businesses open in an attempt to “find a way to live with the virus”. The government also said that they would continue to watch what happens with the COVID-19 data, but claims “the Plan B restrictions in England were the correct and balanced approach”.
GBPUSD was able to reclaim the 1.35 handle yesterday, closing close to 1.3550 at the end of the session. Cable opened the day at 1.3491 and finished at 1.3538.
GBPEUR came close to surpass the 1.20 handle on Tuesday but fell just short. The pair opened the day at 1.1950 and closed at 1.1987.
EURUSD traded in a tight range yesterday – opening at 1.2190 and closing at 1.1293.
Also supporting Sterling yesterday was better-than-expecting PMI numbers. Markit/CIPS Manufacturing PMI was forecasted at 57.6 with a previous of 58.1. The Actual reading came in at 57.9. Across the pond however, ISM Manufacturing PMI came in 1.3 under forecast, printing a final figure of 58.7.
On the data front today, Germany and the Eurozone both released their Composite PMI’s. At 13:15, the US will release Decembers ADP Employment Change, forecasted at 400K. Then at 19:00, the FOMC Minutes are released.