It could be a volatile week for the pound, euro and dollar as central banks are due to hold their December monetary policy meetings.
The Federal Reserve will conclude its meeting on Wednesday, and we will hear from both the Bank of England and the European Central Bank on Thursday. After high expectations for an interest rate hike from the Bank of England, this is now thought to be less likely due to a more uncertain economic backdrop.
As well as news from the Bank of England, sterling could continue to react to any updates surrounding the Omicron variant. The pound has already weakened slightly against the dollar this morning due to the Prime Minister’s warning of a “tidal wave” of infections.
A new survey of small businesses in the UK has shown that a third are planning to cut their staff over the coming months due to the pandemic, supply chain shortages and high energy costs.
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