- British pound (GBP) rises as Omicron so far deemed less severe
- UK economic calendar is light
- Euro (EUR) rises after expansion of business activity
- German ZEW data on economic sentiment tomorrow
The euro pound exchange rate (GBP / EUR) is on the rise at the start of the week, recouping some losses from last week. The pair lost -0.76% over the previous week to settle below € 1.17 on Friday to € 1.1691 daily low. At 5:45 am UTC, the GBP / EUR is trading + 0.28% at € 1.1724.
The British pound lost ground on Friday as investors sold riskier assets and currencies. The pound is considered riskier than the euro. Concerns over Omicron’s business around the world have pissed off investors.
The market has been very responsive to Omicron news as it awaits further information on whether the variant can escape vaccines and whether it is more severe than other COVID variants.
The first data suggests that the new variant is not causing an increase in hospitalizations. The United States is said to be reconsidering the travel ban to South Africa. The news boosted morale in the market. As it is still early.
Data on Friday showed activity in the dominant services sector rose steadily in November to 58.5, although this was revised down from 58.6.
This week, the UK economic calendar is relatively calm, with Friday’s GDP data set to be the highlight. In the meantime, Omicron’s developments will be watched closely.
The euro received a boost on Friday after data revealed trade activity in the region expanded in November, although growth was uneven across countries, Germany experiencing the lowest growth. The euro area composite PMI index stood at 56.9, down from 54.6 in October, although it was slightly down from the preliminary reading of 55.9.
At the same time, retail sales grew 1.4% year-on-year better than expected in October. Although this is only a small increase of 0.2% month-on-month, with inflation in the region having hit a 30-year high. Looking ahead, November numbers could be lower as the fourth wave of COVID hits the region.
There is no high impact data on the Eurozone due for release today. Investors will eagerly await the release of German ZEW sentiment figures on Tuesday.