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Pound Euro Exchange Rate News: GBP/EUR Gains Ground as Omicron Concerns Continue

December 2, 2021 - Written by John Cameron

Pound (GBP) Slowly Rising as Omicron Concerns Continue

The Pound to Euro (GBP/EUR) exchange rate is firming this morning as fears over Omicron continue to dominate market sentiment.

The uncertainty surrounding the newly-identified coronavirus strain, Omicron, continues to stoke volatility in FX markets.

However, despite concerns earlier in the week regarding the effectiveness of current vaccines against the new strain, scientists are increasingly hopeful they will be successful in reducing the impact of Omicron.

George Scangos, chief executive officer of Vir, said:

‘Sotrovimab was deliberately designed with a mutating virus in mind. By targeting a highly conserved region of the spike protein that is less likely to mutate, we hoped to address both the current SARS-CoV-2 virus and future variants that we expected would be inevitable.

‘We have every expectation that this positive trend will continue and are working rapidly to confirm its activity against the full combination sequence of Omicron.’

Meanwhile, capping the upside in Sterling is the announcement that the US will be maintaining tariffs on UK metal products whilst the UK government continues to threaten trigger Article 16 regarding the Northern Ireland protocol.

In September, Nancy Pelosi, Speaker of the US House of Representatives warned that if the Northern Ireland peace agreement was damaged, then the UK would not gain a trade deal with Washington.

Shadow International Trade Secretary, Nick Thomas-Symonds, said:

‘It's been more than a month since the US agreed to lift punitive tariffs on steel and aluminium exports from the EU, but left the same tariffs in place for the UK.

‘The UK steel and aluminum industries should not be a pawn in anyone's political games, when there are jobs and businesses at stake in communities across our country.’

Although the Pound is currently gaining against the Euro, GBP may be affected throughout the day should more Omicron and Brexit Headline emerge.

Euro (EUR) Dips amid Omicron Worries

The Euro (EUR) traded fairly flat overnight following Wednesday’s recovery but has been dropping since the opening of today’s session.

The uncertainty surrounding Omicron has negatively impacted EUR as investors remain cautious of research findings.

On Tuesday, Emer Cooke, the executive director of the European Medicines Agency, said:

‘We are prepared. We know that at some stage there will be a mutation that means we have to change the current approach.’

How these changes will impact the spread of Omicron across Europe remains to be seen, leaving EUR volatile.

Moreover, the single currency may be influenced by Eurozone data released this morning.

October’s unemployment rate printed at 7.3%, down from 7.4% in September, and printing in line with expectations.

On the other hand, October’s PPI printed at 5.4%, exceeding both the previous month’s 2.8% and the forecast 3.5% by a significant amount.

Also influencing the Euro might be a speech by the European Central Bank’s (ECB) Fabio Panetta later this afternoon.

GBP/EUR Exchange Rate Forecast: Pound Limited by Omicron Apprehension

Looking ahead, the Pound to Euro exchange rate (GBP/EUR) has the potential to fluctuate as Omicron research continues to uncover new information.

An absence of data surrounding the Pound is likely to leave GBP susceptible to Omicron and Brexit developments.

Meanwhile, the Euro may be influenced by the release of data on Friday. Retail sale growth in the Eurozone is forecast to rise from –0.3% to 0.2% in October, and ECB President, Christine Largarde, is scheduled to deliver a speech in the morning.

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