Sterling opens just below 1.3650 against the dollar
Sterling appeared to have reached a peak of good news as speculation that England could ease covid restrictions failed to lift it further. During the morning the Pound dipped below 1.3650 to the dollar and the Euro edged above 1.1970, but steady risk appetite limited further Pound selling.
UK jobless claims declined to 43,000 for December and unemployment edged lower to 4.1% from 4.2% in the three months to November. Wages data was in line with expectations as the underlying rate slowed to 3.8% from 4.3%. German foreign minister Annalena Baerbock visited both Kyiv and Moscow aiming to deescalate the situation between Russia and Ukraine. The market also priced in a 0.2% rate hike in Europe by the end of 2022 despite the central bank’s insistence that conditions for a rate increase were very unlikely to be met this year. And Martin Luther King day subdued trading in the US as well as delaying Dollar payments for 24 hours.
The next major UK news will be inflation data and Governor Bailey’s testimony to the Treasury Select Committee on Wednesday, which is significant for Bank of England expectations.
Sterling opens just below 1.3650 against the dollar with the Euro around 1.1965.