Home > Sterling steady against dollar, euro muted- Market update

Sterling steady against dollar, euro muted- Market update

  • Sterling is up against the dollar two days straight, with upside moves strengthened by the UK government's decision not to impose tighter restrictions in response to the Omicron.

  • Notably, the latest uptick for GBP comes on the back of a slowdown for the FTSE and muted openings for broader European stocks as Omicron remains a key factor to investor sentiment.

Sterling is poised above $1.33 as it continues to firm up against the dollar on Thursday, even as the European stock market looks to hold onto gains seen following Wednesday’s bounce.

The GBP/USD pair was up 0.26% as at 10:30 UK time, holding steadily above $1.329 and with intraday highs around $1.3305. An intraday low is formed near $1.324, to indicate that the day’s range limit is still way off recent highs of $1.34 reached when the Bank of England announced a 25 basis point hike to interest rates in mid-December.

However, GBP/USD pair appears to be tracking an aggressive buy the dip scenario after the downturn since the BoE rate hike last week. It puts the pound in the green for a second straight day, with the UK government's move not to impose tighter restrictions likely propping up the upbeat outlook.

GBP is also showing strength against the US dollar even as the market digests official data on the UK’s economy.

According to data out Wednesday, the economy is shown to have grown at a slower pace than earlier details showed, with the increase in Covid-19 cases due to the Omicron strain only expected to add to the lagging. Although GDP growth for Q3 was estimated at 1.3%, official figures put it at 1.1%.

The pound was also marginally up against the euro, which itself remained largely muted against the dollar.

The Sterling was up 0.32% to exchange at 1.18 euro. Meanwhile, the eurozone currency was holding around 1.129 against the dollar. The EUR/USD pair hovered just in the green during the morning session, with gains fluctuating below 0.1%.

The dollar index remains above key support levels, currently propped around 96.35, about 0.15% down against a basket of its peers.

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