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Further UK restrictions weaken sterling

Further UK restrictions weaken sterling

Once again this week we have seen Covid-19 related newsflow driving Market sentiment. Some positive news came from a vaccine maker regarding the efficacy of their shot against Omicron, showing that 3 vaccine doses are effective against the variant did help some global markets, but tighter restrictions in the UK have had a negative impact on sterling.

Yesterday saw the euro holding a firmer tone as ECB Vice-President de Guindos stated that Covid restrictions will not “derail the Euro-area recovery”, which was boosted further by a positive statement on Covid-19 vaccines. As mentioned above, yesterday’s announcement regarding further UK restrictions pushed sterling down to $1.32 against USD. 

As we get going this morning, EUR/GBP opened in the top half of the 85-86p band, EUR/USD regained some ground above the $1.13 threshold and GBP/USD continues to operate down at the $1.32 mark. Looking ahead to today, with a dry data diary on both sides of the Atlantic and the latest Covid-19 restrictions, traders will be closely following pandemic related newsflow.

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