Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

GBP/USD extended a loss from last Friday at the start of the new week amid broad risk aversion across financial markets as surging Omicron infections in Europe raised concerns of potential lockdowns.

Britain’s Deputy Prime Minister Dominic Raab said earlier Monday that he could not make any guarantees when asked if there would be further restrictions imposed prior to Christmas to curb the virus spread.

The Sterling remained under pressure also due to some negative Brexit-related headlines. It became clear that Foreign Secretary Liz Truss will become Britain’s lead negotiator with the EU over trade to Northern Ireland after Brexit minister David Frost resigned.

Last Thursday the major currency pair hit a three-week high of 1.3374, after the Bank of England’s monetary policy committee voted by 8 votes to 1 in favor of raising the Bank Rate from 0.10% to 0.25%. The MPC made its decision, as it weighed a surge in UK CPI inflation and economic slowdown concerns, stemming from the fast spread of the Omicron coronavirus strain.

At the same time, there was a 9-0 vote in favor of maintaining the scale of quantitative easing at GBP 895 billion.

However, gains in GBP/USD following BoE’s policy decision have now been erased.

“Support from the blindsided BoE action in raising rates was only temporary with focus more on Omicron and government disarray,” NAB strategists wrote in a note to clients.

As of 10:03 GMT on Monday GBP/USD was edging down 0.33% to trade at 1.3190, while moving within a daily range of 1.3173-1.3245. Last week the major Forex pair went up as high as 1.3374, which has been its strongest level since November 24th (1.3390). The currency pair has retreated 0.82% so far in December, following another 2.82% loss in November.

Bond Yield Spread

The spread between 2-year US and 2-year UK bond yields, which reflects the flow of funds in a short term, equaled 12.16 basis points (0.1216%) as of 9:15 GMT on Monday, down from 14.2 basis points on December 17th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – 1.3268
R1 – 1.3305
R2 – 1.3377
R3 – 1.3415
R4 – 1.3453

S1 – 1.3196
S2 – 1.3158
S3 – 1.3087
S4 – 1.3015

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • Dollar Rebounds, Gold Slips AgainDollar Rebounds, Gold Slips Again Gold fell during the afternoon european session today after the greenback gained strength following disappointing data from Germany. The ZEW index of German economic sentiment rose to 36,4, up from 36,3 in April, but way below expectations of […]
  • Lockheed Martin set to bolster weapons systems productionLockheed Martin set to bolster weapons systems production Lockheed Martin Corp (NYSE: LMT) said this week it was on course to increase production of its weapons systems in an attempt to meet higher demand as security concerns are escalating.The defense company said it was set to increase […]
  • Copper retreats as U.S. government shutdown continues, China dataCopper retreats as U.S. government shutdown continues, China data Copper fell on Thursday as the U.S. government shutdown entered a third day and threatened to impact the economic growth if it extends into next week. Larger than expected expansion of Chinas service sector however limited losses.On the […]
  • USD/JPY OutlookUSD/JPY Outlook The US dollar's rally against the Japanese yen appears to be losing steam, with the USD/JPY exchange rate falling towards its weekly low. This decline may reduce the likelihood of a currency intervention, as the initial surge following the US […]
  • Sony Corp. share price up, reports a heavy loss as PlayStation shinesSony Corp. share price up, reports a heavy loss as PlayStation shines Sony Corp. reported a smaller loss than expected in the second fiscal quarter as PlayStation 4 sales limited the impact of a writedown of its smartphone business.Japans Sony stated a net loss of ¥136.0 billion, highly due to the ¥180 […]
  • Gold trading outlook: futures re-test 2-week lows ahead of BoE policy decisionGold trading outlook: futures re-test 2-week lows ahead of BoE policy decision On Wednesday (in GMT terms) gold for delivery in August traded within the range of $1,328.00-$1,347.55. Futures closed at $1,343.60, rising 0.71% compared to Tuesday’s close. It has been the 137th gain in the past 293 trading days and also the […]