Markets seem unaffected by allegations of Cabinet lockdown gatherings


The pound has remained supported throughout the beginning of this week as currency markets continue to bet on the UK economy outlasting the omicron variant without having to impose further restrictions to the country. An increased probability of further near term rate hikes by the Bank of England also continues to give Sterling a level of support not seen towards the end of the previous year.

Currency markets seem to be largely discarding the pressure the UK Prime Minister and government are currently under regarding potential parties held during multiple lockdowns, with another story released this week related to the Prime Minister’s Private Secretary inviting colleagues to drinks at Downing Street.


A down-trending US Dollar also gave way for Sterling to outperform its G10 peers.

Federal Reserve Chair Jerome Powell’s renomination on Tuesday was seen for some as a safe bet for hawkish comments regarding monetary policy over the near term, instead we got quite the opposite. Powell said it could take a number of months to decide whether to run down the central bank’s balance sheet and relaxed thoughts of a sudden withdrawal of monetary support. US treasury bond yields pulled back as a direct result of this.

Currency markets will look towards the US CPI data release today for further guidance on where the USD should be valued right now. A higher than expected reading will very likely lift the USD.

Key announcements

13:30 – US CPI data release. Expected to rise to 5.4 from a previous reading of 4.9