Markets traded largely flat yesterday as investors wait for further direction on the Omicron COVID-19 variant. The World Health Organization have this morning warned that all countries should prepare for potential COVID-19 surges, noting that the geographical distribution of the new Omicron variant is “likely already wider than currently reported”. Dr Babatunde Olowokure, WHO regional emergency director, says that blanket travel bans will only delay the entry of the variant into countries. He also claims that in their research, the WHO have found no evidence to suggest a need to change the approach of the pandemic adopted by countries so far. Experts have said “that mask wearing, physical distancing, hand hygiene, crowd avoidance, contact tracing and case isolation, and vaccination all remain important”.
While some countries have gone into lockdown and taken other measures to stop the spread of the virus, President Joe Biden has announced stricter COVID-19 travel rules following the US confirming “a handful of cases of the Omicron variant from coast to coast”. From next week, all international travellers to the US must get a COVID-19 test within one day of departure, regardless of their vaccination status. Mask requirements will also be implemented on planes, trains and buses will be extended until mid-March. Until there is further clarity on how disruptive the new Omicron variant will be, markets will be hesitant to make aggressive bets; but as countries put in place more restrictions, this in itself could have a negative knock-on effect on the currency market.
After reclaiming the 1.33 handle, Cable did well to stay above that mark till the close. GBPUSD started Thursday at 1.3307 and closed at 1.3305. Following the Asian session however, Cable trades south of 1.3290.
GBPEUR in contrast made minor gains yesterday, attempting to push towards 1.18. The pair opened at 1.1751 and closed at 1.1770.
EURUSD made a loss on Thursday, dropping closer to the 1.1300 handle by the end of the session. The pair started the day at 1.1323 and closed at 1.1305.