|
Analysts said the currency has strengthened since mid-December
as UK government resistance to further COVID-19 restrictions
provided a much-needed boost to sentiment.
Britain has focused on rolling out booster vaccinations - which
have reached more than 60% of the population - rather than
requiring a return to lockdown measures.
Meanwhile, investors have ramped up expectations that the Bank
of England will raise interest rates as early as next month
after a surprise hike in December.
"We are looking for a decent November UK GDP release tomorrow of
0.4% month over month, which should keep expectations alive of a
further Bank of England rate hike on February 3," ING analysts
said, recalling that overnight indexed swap (OIS) market prices
an 80% chance of a 25 bps hike.
A preliminary estimate of UK gross domestic product for November
is due on Tuesday.
Sterling dropped 0.1% versus the dollar to $1.358 at 0903 GMT,
close to its highest level since November 2021 at $1.3599
touched last week.
It was 0.2% higher at 83.38 pence per euro, after hitting its
highest level since February 2020 at 83.34.
The pound entered 2022 “with a tailwind of cautious optimism;
the market will be looking closely at Omicron data, and any
immediate indication of Liz Truss’s focus areas, as an
indication of the tone taken by the Bank of England in Q1,” Joe
Tuckey, FX Analyst, Argentex said.
Foreign Secretary Liz Truss is Britain's lead negotiator with
the European Union over trade to Northern Ireland following the
resignation of Brexit minister David Frost.
Truss said ahead of talks with the European Union over post-Brexit
trade arrangements that the United Kingdom is ready to take
unilateral action to suspend customs checks on goods moving to
Northern Ireland.
(Reporting by Stefano Rebaudo; Editing by William Maclean)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
