Home Daily Commentaries Concerns grow over Omicron variant

Concerns grow over Omicron variant

Daily Currency Update

GBP - British Pound

The pound remains fragile as investors await further developments on the Omicron variant, although the UK's advanced booster vaccine programme could yet offer support.

The pound has traditionally struggled against the euro and US dollar in times of falling global market sentiment and the current environment may lends itself to weakness in both GBPUSD and GBPEUR exchange rates.

Today's attention is very much on the composite PMI, a good gauge of business activity. Expectations are for it to slip to 58.6, down from 58.7, however, a better than expected outcome could be good for the pound.

Key Movers

The euro weakened yesterday despite PPI inflation data surging to 21.9% year on year, well over the 19% forecast and the 16.9% recorded in September. This data release puts pressure on the European Central Bank to tighten monetary policy.

Today Eurozone retail sales are in focus and are expected to rise 1.2% YoY down from 2.5%. The Eurozone composite PMI was expected to be released at 56.6 this morning, however, a release of 55.5 did little to move the EUR against the USD and GBP.

Expected Ranges

  • GBP/USD: 1.3265 - 1.3335 ▲
  • GBP/EUR: 1.1740 - 1.1780 ▲
  • EUR/USD: 1.1255 - 1.1305 ▼