Sterling is under pressure amidst fears of new coronavirus strain in the UK and lockdown restrictions. Prime Minister Boris Johnson warned on Friday that the new UK COVID-19 variant might be associated with a higher level of mortality. Also, the British government has extended lockdown laws to give councils the power to close pubs, restaurants, shops, and public spaces until July 17.
Early by Tuesday, the UK’s Office for National Statistics (ONS) will release the December month Claimant Count figures together along with the Unemployment Rate in the three months to November at 07:00 AM GMT. The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to November, grew from the previous 2.7% to 2.9%, while ex-bonuses, the wages are seen improving from 2.8% to 3.1% during the mentioned period.
The number of people seeking jobless benefits, named as the Claimant Count Change jumped to 64.3K in November, expected +35K for December, whereas the ILO Unemployment Rate suggests a further improvement in the employment data from 4.9% to 5.1% during the three months ending in November.
On the other hand, US dollar seems to be stronger on Tuesday as rising coronavirus cases and doubts over the speed and size of U.S. stimulus encouraged the traders’ upward mood, while investors were also cautious ahead of the Federal Reserve’s policy review later in the week.
Markets have come a long way in the hope that COVID will go away and governments will spend a lot of money,”said Imre Speizer, a Westpac currency analyst. However, currency markets have entered a capture pattern as they wait to see if the Democrats’ big anti-virus package can wipe out Congress and whether the COVID-19 vaccine will actually start to turn the tide.
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