British pound advances despite cooling UK economic data

Bundles of sterling banknotes are stacked at the headquarters of Money Service Austria in Vienna, Austria on November 16, 2017. REUTERS / Leonhard Foeger / File Photo

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LONDON, Jan. 7 (Reuters) – The pound was on track on Friday for weekly gains against the dollar and the euro from 2022, despite a mixed picture emerging for the UK economy.

The currency has strengthened since mid-December in part due to the fact that the Omicron variant of COVID-19 has proven to be less disruptive to the economy than originally feared, analysts said. as the government has so far tightened restrictions only slightly.

The British pound was heading for a gain of 0.4% against the dollar for the week and 0.6% against the euro.

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During the day, the British pound was up 0.3% against the dollar at $ 1.35720.

The pound’s gains partly reflected a weaker dollar across the board, after a US jobs report in December missed expectations. Read more

Against the euro, the pound lost 0.2% to 83.585 pence per euro.

Data from this week’s economic survey showed Omicron has had an impact. Survey data for the UK construction sector on Friday showed growth slowed in December, falling to its lowest level in three months.

A similar Purchasing Managers Index (PMI) survey for the services sector on Thursday showed the biggest loss of momentum since the country’s last lockdown, falling to a 10-month low in December. Read more

Overall, however, the pound maintained its momentum against the dollar, dropping from a one-year low to $ 1.31615 reached in December.

Investors will be watching closely if the Bank of England tightens policy further, with another interest rate hike expected as early as next month after a surprise hike in December. Read more

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Reporting by Iain Withers; Editing by Andrew Cawthorne and David Evans

Our standards: Thomson Reuters Trust Principles.

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