Pound seems to recover against the greenback during early Wednesday. The GBP/USD quote is seen to cheer the market’s optimism the previous day to snap a two-day downtrend. However the Omicron fears and Brexit woes challenge the pound and the cable traders are keen on the upcoming GDP quarterly report.
Omicron infections are multiplying across Britain, Europe, the United States and Asia, causing countries across the globe to consider new curbs on movement and reimpose quarantine periods for incoming visitors.
However, Ruling out of any tougher lockdown measures ahead of Christmas by UK PM slightly favors the Sterling. Elsewhere, Health Secretary Sajid Javid has mentioned a reduction in the virus-linked self-isolation period to seven days from previously 10.
British finance minister Rishi Sunak has announced an additional 1 billion pounds ($1.33 billion) in financial support for the hospitality and leisure sectors, with every business able to claim a one-off cash grant of 6,000 pounds.
Talking on the Brexit woes, The New In charge of Brexit, Liz Truss, said London’s position remained unchanged and the process needed to speed up in the New Year. She also adds “Our preference remains to reach an agreed solution.” After a first online meeting with her European Union counterpart Maros Sefcovic on Tuesday.
“If this does not happen we remain prepared to trigger Article 16,” she said, referring to a safeguard measure in the Northern Ireland protocol of the Britain-EU divorce deal.
Following the meeting, Sefcovic said on Twitter: “I’m committed to continue working towards a conclusive understanding with the UK on practical solutions for NI stakeholders. The EU’s position is known. Our goal: stability and predictability.”
On the other hand, U.S. Senator Joe Manchin, a conservative Democrat who is key to President Joe Biden’s hopes of passing a $1.75-trillion domestic investment bill – known as Build Back Better – said on Sunday he would not support the package, prompting a sell-off in global markets, This created a risk appetite in the market favoring the riskier currency – pound.
Moreover, U.S. Food and Drug Administration is set to authorize COVID-19 treatment pills from both Pfizer Inc PFE.N and Merck MRK.N as early as Wednesday also improved the market mood.
GBP/USD 4 Hour Chart: