Pound Plummets as Fresh Restrictions Rumoured for UK, Euro Boosted as Investors Buy Dip

Pound (GBP) Falls as UK Rumoured to be Introducing Fresh Restrictions 

The Pound (GBP) has fallen against its competitors today as surging cases of the Omicron variant and rumours of further restrictions placed pressure on the currency.  

Sterling has also suffered due to Brexit uncertainty today as UK foreign secretary Liz Truss replaced chief Brexit negotiator David Frost following his shock resignation over the weekend.  

The announcement, or rumours, of any further restrictions in the UK could drive the Pound further down during tomorrow’s session.  

Euro (EUR) Boosted by Investors as Netherlands Introduces Lockdown 

The Euro (EUR) has been buoyed today as investors ‘bought the dip’ while European stocks slid amid fresh restrictions and lockdowns across the trading bloc.  

The Netherlands became the most recent country to introduce a full lockdown on Sunday, with Norway and Denmark also introducing further restrictions to help combat the Omicron variant. 

Reports that last week’s monetary policy decision by the European Central Bank (ECB) may not have been as unified as previously thought may have prompted speculative bets on the currency today.  

The rolling out of further restrictions and lockdowns across the Euro Area is likely to cause a forecast fall in consumer confidence to print as expected on Tuesday, which may also drive the Euro downward. 

US Dollar (USD) Buoyed by Risk-Off Market Attitude as Biden’s Bill Stalls 

The US Dollar (USD) has benefitted from a risk-averse trading environment today whilst seeing significant domestic headwinds, as President Joe Biden’s $1.75 trillion ‘Build Back Better’ bill may not pass. 

US Senator Joe Manchin appeared on Fox news on Sunday to criticise the bill, citing concerns over inflation as his main reasons for opposing the bill. 

Final readings of the country’s GDP figures for the third quarter are forecast to show is forecast to fall as the country’s recovery stumbles in the face of the Omicron variant. Along with a forecast fall in personal spending in November, USD could trend downward over the course of the week. 

Australian Dollar (AUD) Fluctuates amid Omicron Fears 

The Australian Dollar (AUD) fluctuated today amidst fears that the Omicron variant may impact the country’s post-lockdown recovery.  

The Reserve Bank of Australia’s (RBA) mid-year economic outlook later today and Tuesday’s meeting minutes are likely to picked over by investors for any signs of hawkish future policy, which could push AUD further upward. 

Canadian Dollar (CAD) Drops as Oil Prices Tumble 

The Canadian Dollar (CAD) has dropped against its rivals today as the commodity-tied ‘Loonie’ continues to be affected by fluctuating oil prices. Oil prices slumped by nearly $3 today as a surge in cases of the Omicron variant in both Europe and the United States caused further concerns regarding demand for crude oil. 

Retails sales figures for October are forecast to show a rise on Tuesday which may boost the ‘Loonie’.