The pound fell around half a cent against both the dollar and euro yesterday but remains steady in early trading. Sterling was undermined by the announcement of the first omicron related death in the UK, increasing fears that the government could impose further lockdown restrictions. This morning deputy Prime Minister Dominic Raab reported that there were at least 250 people in hospital with Omicron and that those numbers could increase dramatically unless swift action was taken. British employers added a record number of staff in November. Data released this morning from the UK tax office showed 257,000 were added to company payrolls last month, the most since records began in 2014.
The euro remains weighed down against the dollar amid Omicron fears. Unlike the US, economic recovery in Europe is much more fragile and investors fear it could become the epicentre of the new variant, as it becomes the dominant strain on the continent. However, France said this morning that it has no plans to change current protocols to curb the spread of the virus, announcing that there were around 130 Omicron cases in the country. Later this morning, Industrial production figures for the region are released.
The dollar scaled a one-week high versus a basket of major rivals on Tuesday, supported by expectations of a hawkish Federal Reserve meeting this week and safe haven demand amid market fears about the Omicron coronavirus variant. The central bank begins its two-day meeting today, where it’s expected to announce that it will wrap up its pandemic bond buying scheme sooner than previously communicated, potentially setting up earlier interest rate increases next year. The Producer Price index for November will be released this afternoon.
10.00 am EUR Eurozone industrial production
01.30 pm US PPI