- Pound (GBP) steadies after steep losses from COVID restrictions
- COVID restrictions see investors push back on BoE rate rise
- Euro (EUR) eases lower after strong gains yesterday
- German trade data due
The Pound Euro (GBP/EUR) exchange rate is heading higher on Thursday after steep losses in the previous session. The pair settled -0.90% lower on Wednesday at €1.1645 towards the low of the day. At 05:45 UTC, GBP/EUR trades +0.11% at €1.1658.
The pound tumbled in the previous session after British Prime Minister imposes tougher COVID-19 restrictions in England. The new rules, called Plan-B orders people to work from home, wear masks in public and use vaccine passports to slow the spread of the new Omicron strain of COVID.
The new rules come on the same day that Pfizer announced that its COVID vaccine with BoiNTech sees reduced efficacy with 2 doses against Omicron. However, 3 doses reportedly neutralises the new variant. The UK government is now in a race to get the booster jab roll-out ramped up.
This latest news will be a blow to city restaurants, shops and cafes which were desperate for strong Christmas trade to rebuild their finances.
The pound fell following the announcement as investors pared back bets that the Bank of England will hike interest rates soon. The BoE was widely expected to raise rates in November. Failing that, investor set their sights on December, but now Spring next year seems more likely.
There is no high impacting UK economic data due to be released today. Omicron headlines are expected to continue driving the pair.
The Euro managed to push higher versus the Pound yesterdau after slightly more hawkish comments from the European Central Bank. ECB Governing Council member Martins Kazaks said that Omicron would need to do significant damaged to the eurozone economy in order for the ECB to consider boosting its stimulus programme. The PEPP bond buying programme is expected to conclude in March.
The Eurozone economic calendar is quiet. German trade data and COVID developments are likely to drive the pair.