Pound (GBP) Undermined by Record-High Infections
The Pound (GBP) fell against most of its rivals on Friday, despite the latest retail sales data beating forecasts by 0.6 percentage points to print at 1.4%.
The downside came amid increased concern over the UK’s Omicron situation, with daily Covid cases hitting a record high of 93,045.
Over the weekend, Health Secretary Sajid Javid signalled that the government could bring in further restrictions before Christmas. As a result, Sterling may struggle today.
Euro (EUR) Dented by Drop in German Business Morale
The Euro (EUR) slipped against many of its peers on Friday’s session after business morale in Germany fell for its sixth consecutive month.
The Ifo business climate indicator for December dropped from 96.6 to 94.7, its worst level since February, as further Covid restrictions, slowing growth and soaring prices darken Germany’s outlook.
With a lack of European data out today, EUR movement may be limited. However, the single currency could gain against some of its riskier rivals.
US Dollar (USD) Strengthens as Market Mood Sours
The safe-haven US Dollar (USD) firmed on Friday as global markets worried about the rapid spread of the Omicron variant.
Hawkish turns from many central banks, including the Federal Reserve and the Bank of England (BoE), also weighed on markets. Investors are now gearing up for less financial stimulus and higher borrowing costs.
With Omicron continuing to surge across the world, the prevailing risk-off mood could see USD make further gains today.
Canadian Dollar (CAD) Slips as Omicron Dents Oil Demand
The commodity-linked Canadian Dollar (CAD) dipped through Friday’s session as Omicron fears weighed on oil prices. Investors are worried that the spread of the virus could dent global demand for crude.
Oil prices are continuing to fall this morning. As a result, CAD could weaken further.
Australian Dollar (AUD) Weakens amid Risk-Off Market Mood
The Australian Dollar (AUD) fell overnight as Omicron fears grow, thereby dampening the appeal of the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Falls amid Cautious Trade
The New Zealand Dollar (NZD) also lost ground overnight, despite a rise in New Zealand imports and exports, as the bearish market mood weighed on the perceived riskier ‘Kiwi’.