January 11, 2022

Thanks USD, Pound Breaks 2 Months Highest Level!

 The pound traded to a two -month high in the European session on the back of a weaker US dollar ahead of Federal Reserve (Fed) Chairman Jerome Powell's testimony.


At the time of writing, the pound sterling strengthened at around 1.3600 against the US dollar after successfully breaking it at the beginning of the session.


The US dollar continued to weaken following investor vigilance ahead of Jerome Powell's testimony before the Senate tonight that will discuss inflation and market players will be looking for clues as to when rates will be raised.



The pound has gained strength after the Bank of England (BOE) made a surprise move by raising its interest rates last week to curb rising high inflation in the UK.


Meanwhile, investor concerns over the contagion of the Omicron variant that caused the latest wave of Covid-19 in the UK also eased after Prime Minister Boris Johnson repeatedly insisted it would not implement additional sanctions to curb it.


The release of Gross Domestic Product (GDP) data on Friday will be the main focus of investors expecting a quick recovery in the UK economy in November.


Prior to that, US inflation data will be shown first on Wednesday, which will affect the movement of the US dollar and the pound.