A break below 1.3530 opens risk to the January 3 low a cent lower near 1.3430.has fallen some 0.51% on Tuesday from a high of 1.3661 to a fresh low of 1.3573. The surge in US Treasury yields has lifted the US dollar out of the doldrums while UK politics weighs on the tainted British currency as well.
However, in the coming few months ahead, Johnson's popularity and sterling's robustness will be scrutinised once again when local elections are held across England, Scotland and Wales on May 5. A civil investigation in Partygate is underway but it is broadly accepted across the party that removing Johnson before this date would be extremely dangerous, as no one could be certain what the consequence would actually be. This could bring some solace to the pound.
''Moreover, vacancies rose to a record high, further highlighting the tightness of the labour market, and flash December PAYE data shows further signs of strength as it registered +184k despite effects from Omicron.'' governor Andrew Bailey has to say on Wednesday when speaking to the Treasury Select Committee when inflation data is also due.
''The money market is still positioned for a fair amount of tightening next year though the fact that speculators are still net short of GBP still suggests that some types of investors remain sceptical of its outlook,'' analysts at Rabobank explained.
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