GBP/USD Steadies After Wednesday’s 2021 Lows
UK Covid Rules
The UK government announced tougher Covid-19 rules on Wednesday, following the rapid spread of the Omicron variant. There were 568 confirmed cases across the UK, as per yesterday's announcement. [1]
The Plan B, includes measures such as work from home, compulsory face masks on public indoor venues and mandatory NHS Covid Pass in specific settings. Gradual Implementation of the new rules, will start this Friday, December 10.
Recent Covid News
Director General of the World Health Organization (WHO), Dr Tedros, warned in the latest press briefing that "certain features of omicron, including its global spread and large number of mutations, suggest it could have a major impact on the course of the pandemic", while announcing that the Omicron variant has been reported in 57 countries. [2]
UK's stricter measures and Dr Tedros' warning dented this week's optimism around the new Covid variant, following upbeat commentary around its severity. The latest boon to sentiment came from Pfizer and BioNTech, which announced yesterday, that three doses of their Covid-19 vaccine could neutralize the Omicron variant (B.1.1.529 lineage), based on preliminary laboratory studies. [3]
GBP/USD Reaction
The British pound took a hit from the news of imminent tougher Covid-19 rules in the UK, dropping to its lowest level since November 2020 against the greenback on Wednesday (1.3159), but steadies as we head towards the opening of European markets.
Past Performance: Past Performance is not an indicator of future results.
We will need to see in what mood they will start the day and whether they can sustain recent optimism. Upbeat mood could help GBP/USD push for the EMA100 and the descending trend-line from November high (1.3250-70), but a catalyst will likely be required for the breach of both. Successful effort could potentially spark a short-squeeze towards mid-1.3300s.
However, broader risk is clearly tilted to the downside and the pair remains in precarious position technically, while expectations around monetary policy from the Bank of England and the Fed, remain unfavorable. The pair is vulnerable to 1.3133, but it is probably early to talk about challenges to 1.3013-00.
From today's economic calendar, only US Jobless claims stand out. On Friday however, the UK releases Industrial & Manufacturing Production and October GDP, while from the US we expect the latest CPI Inflation data.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 09 Dec 2021 https://www.gov.uk/government/news/prime-minister-confirms-move-to-plan-b-in-england | |
| Retrieved 09 Dec 2021 https://twitter.com/i/broadcasts/1yoJMWgvbMpKQ | |
| Retrieved 20 Apr 2026 https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-provide-update-omicron-variant |
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