BAFL 38.85 Increased By ▲ 0.10 (0.26%)
BIPL 15.78 Increased By ▲ 0.72 (4.78%)
BOP 3.71 Increased By ▲ 0.07 (1.92%)
CNERGY 2.98 Increased By ▲ 0.03 (1.02%)
DFML 16.36 Increased By ▲ 0.30 (1.87%)
DGKC 44.63 Increased By ▲ 1.23 (2.83%)
FABL 21.84 Increased By ▲ 0.40 (1.87%)
FCCL 11.02 Increased By ▲ 0.23 (2.13%)
FFL 5.92 Increased By ▲ 0.10 (1.72%)
GGL 9.18 Increased By ▲ 0.08 (0.88%)
HBL 96.26 Increased By ▲ 0.76 (0.8%)
HUBC 84.63 Decreased By ▼ -0.07 (-0.08%)
HUMNL 5.71 Increased By ▲ 0.01 (0.18%)
KEL 1.90 Increased By ▲ 0.01 (0.53%)
LOTCHEM 25.57 Increased By ▲ 0.44 (1.75%)
MLCF 29.78 Increased By ▲ 1.28 (4.49%)
OGDC 95.54 Increased By ▲ 0.44 (0.46%)
PAEL 9.59 Increased By ▲ 0.26 (2.79%)
PIBTL 3.64 No Change ▼ 0.00 (0%)
PIOC 85.62 Increased By ▲ 0.67 (0.79%)
PPL 72.40 Increased By ▲ 0.68 (0.95%)
PRL 15.07 Increased By ▲ 0.29 (1.96%)
SILK 0.96 Decreased By ▼ -0.03 (-3.03%)
SNGP 45.59 Increased By ▲ 0.41 (0.91%)
SSGC 9.08 No Change ▼ 0.00 (0%)
TELE 6.93 Increased By ▲ 0.12 (1.76%)
TPLP 12.42 Increased By ▲ 0.10 (0.81%)
TRG 90.16 Increased By ▲ 0.61 (0.68%)
UNITY 24.34 Increased By ▲ 0.94 (4.02%)
WTL 1.15 No Change ▼ 0.00 (0%)
BR100 4,639 Increased By 56.2 (1.23%)
BR30 16,478 Increased By 197.6 (1.21%)
KSE100 46,202 Increased By 312.6 (0.68%)
KSE30 16,207 Increased By 120.5 (0.75%)

LONDON: Sterling strengthened against the euro on Tuesday but stayed within recent ranges as uncertainty around the Omicron variant of COVID-19 limited the market impact of strong UK jobs data.

Since the first Omicron cases were detected on Nov. 27 in Britain, the UK has imposed tougher restrictions. But Prime Minister Boris Johnson faces a large rebellion among his Conservative lawmakers in a parliamentary vote over the measures later on Tuesday.

On Sunday, Johnson said that Britain faces a "tidal wave" of the variant and on Tuesday he warned ministers that there will be a "huge spike" in cases.

The pound fell on Monday due to Omicron fears but on Tuesday recovered to 85.18 pence per euro at 1653 GMT.

Versus the dollar, it was up 0.1% at $1.3228, pushed higher by a slip in the dollar. However, the dollar was still near one-week highs, supported by its role as a safe-haven currency, as well as expectations that the U.S. Federal Reserve would be hawkish at its meeting this week.

The spread of the Omicron strain has raised fears of an economic slowdown, prompting investors to bet against the Bank of England raising rates at its meeting on Thursday.

Sterling edges down to near 2021 low versus dollar

"Nobody expects anything from the MPC (Monetary Policy Committee) on Thursday," said Kit Juckes, head of FX strategy at Societe Generale, who said he expected sterling to stay steady for the rest of the session.

"The fact of Omicron just means that if it wasn't a bad idea to do something about monetary policy in December already, it's a completely daft idea now."

"Omicron adds both a significant layer of uncertainty and a layer of downside risk for the economy, clearly."

The pound barely reacted to strong UK jobs data earlier in the session, which showed that British employers hired a record number of staff in November, suggesting that the labour market withstood the end of the government's furlough scheme.

The BoE is under pressure to address fast-rising inflation. The International Monetary Fund warned the central bank to avoid an "inaction bias" in its approach to combating price pressures. UK inflation data is due on Wednesday.

"I think BoE should be hiking because economic data calls for them to respond," said Charles Diebel, head of fixed income at Mediolanum International Funds.

"The reality is that the government's reaction function to COVID won't be the same as it was during previous surges so the BoE should focus more on economic data.

"If you don't get a lockdown you won't get the same pressure on the economy but you will still get pressure on inflation."


Comments are closed.

Sterling edges higher versus euro as investors weigh up Omicron risk

Dr Shamshad shares salient features of draft SOEs policy

Collect more taxes from the wealthy, protect the poor: IMF chief to Pakistan

12th successive gain: rupee settles at 292.78 against US dollar

Open-market: rupee improves slightly against US dollar

Afghanistan's interim govt must take 'solid practical steps' against TTP: FM Jilani

KSE-100 gains 313 points as ECP announces election week

After UAE restriction, TOMCL says will continue meat exports to UAE via sea

Sheikh Rashid’s Lal Haveli residence in Rawalpindi sealed

Sri Lanka August consumer price inflation eases to 2.1%

Oil falls as US rate hike expectations offset tight supply outlook