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This cookie is used for determining whether it should continue serving 'Always Online' until the cookie expires. This cookie is set by the provider Cloudflare content delivery network. These cookies ensure basic functionalities and security features of the website, anonymously. Necessary cookies are absolutely essential for the website to function properly. ✍️ Our Blog page for other FX market updates 📩 Click here to receive the latest market updates While his comments have provided a little bit of upside support for the pound,futures markets are now only pricing in a 50/50 chance of a 15 basis point rate increase from the BoE this month, having fully priced one in before the omicron news. Fellow MPC member Broadbent reignited hopes of a hike this year to some extent on Monday, saying that UK inflation was likely to comfortably exceed 5% in April next year. Notorious hawk Michael Saunders said last week that he would need more information on the new variant before deciding whether to vote in favour of a rate hike next week. The general feeling in the market is that the omicron news makes a December Bank of England interest rate hike far less likely. Meanwhile, sterling managed to eke out gains against its peers on Monday, and is currently trading as the third best performer in the G10 in the past week, behind the Canadian dollar and US dollar. This Friday’s US inflation print is expected to show price growth increased again in November, and that may all but cement plans for further tightening next week. While Friday’s US payrolls report showed a big miss in the headline job creation number, the overall picture is an encouraging one, and we don’t expect it to derail the Fed’s plans. Comments from Fed chair Powell last week suggested that the bank would be moving ahead with plans to speed up tapering at its FOMC meeting next Wednesday.

The Reserve Bank of Australia kept policy unchanged overnight, although said that the new variant was unlikely to derail the recovery. Communications from central bankers on the omicron news have been slightly mixed, although most appear to see the economic risk as minimal.

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