New Covid variant found in Africa

By Ashley Finill


Cases continue to soar throughout the Eurozone, last week Austria announced another full lockdown for the country whilst also making a somewhat shock announcement that vaccines are now to be made mandatory, which sparked outrage with protests not just in Austria but also at the Austrian embassy in the UK and in Brussels. In addition to the announcement the World Health Organisation are also looking to enforce the vaccine to be mandatory, Dominic Raab was interview by Sky news and ask the question if the UK would follow this which he categorically ruled out. Germany is looking to impose tougher restrictions to fight the rising cases and the Netherlands are also announcing tighter restrictions in the country on Friday. The UK government have ruled out any restrictions to be put in place with a better vaccine rollout in the UK throughout 2021, it was also reported yesterday that the Astra Zeneca vaccine is showing longer term protection as opposed to the vaccines administered throughout the Eurozone. As the cold is now truly setting in and cases do begin to rise will we see U-turn from the UK government in imposing some restrictions in the UK? Sterling has made strong gains on the Eurozone’s misfortune in recent weeks but with cases rising and restrictions imposed but could this happen in the UK we could see a drop for Sterling as we have done in the past and the gains could diminish without a moment’s notice. Overnight the Health Secretary Sajid Javid has announced that from noon today six African countries will be added to the red list, flights will be banned to and from those countries due to concerns over a newly identified Covid variant found in both Botswana and South Africa, both of which have been red listed. Javid said the new variant may be more transmissible than the Delta strain and added that the vaccines we currently have may be less effective. This has caused some concern, and should the new strain enter the UK and cause a sharp rise in cases we may see a backtrack on the no further restrictions from the government.

Not a good week for Boris and the Tories

It has been an eventful week on the news front politically, economically and surrounding the coronavirus which had and are likely to continue dictating the currency market later on down the road. Starting in the UK where it has been a week for Boris Johnson to forget, firstly delivering a speech (or not) at the CBI conference where the PM lost his place during the talk to business leaders who attended with hopes of hearing a plan on the path of recovery on the UK’s fragile economy. Then on Wednesday a latest UK voting poll was published showing a ratings slump for Boris and the Conservative Party against the Labour Party for the first time in a few years. On the same day it was also reported that around a dozen Tory MPs have written letters of no-confidence for the Prime Minister. It is suggested that they have been written due to number of issues, namely the handling of the allegations put towards both Owen Paterson and Geoffrey Cox, the cancellation of the northern leg of HS2 and a rumoured plan to abolish the Northern Ireland protocol. With the pressure seemingly mounting for the PM not just from the opposition but his own party, could there be a few ruffled feathers amongst the Conservative Party and a change in leadership come the new year? What we do know is uncertainty is not sterling’s friend, and should there be a shake up in the top spot this could spell danger for the Pound and scupper the gains made over the past few months, watch this space.

Sterling Gains and Losses

Throughout the week the pound made healthy gains on the Euro, up by nearly cent from last week’s trading, however Sterling lost around half a cent throughout yesterday’s trading and overnight another half a cent due to the new variant in Africa, presenting a good opportunity for those of who are looking to sell Euros. Over to the GBP/USD market which has seen sterling continue to lose ground on the US Dollar this week. The Pound has slumped over another 2 cents on the strong Greenback since last Friday, with the drop not looking to stop anytime soon as it is suggested that the Federal Reserve is likely to announce upping the pace of its tapering programme which will pave the way for another interest rate hike in the US next year. Sterling also made significant gains on Turkish Lira this week as did all the other major currencies which was described as an “ugly sell off” for the currency due to Turkey slashing interest rates on Tuesday. This put more worrying pressure on the currency as Sterling alone has made gains of more than 60% for 2021.


As the month draws to a close mostly all data from around the world has been released with nothing to note of any importance today. Next week on Monday some economic data will be released in the Eurozone at 10am and to finish the month on Tuesday CPI data will be announced on 10am in the Eurozone. Across the pond in the afternoon and Canada released GDP at 1.30pm and later at 3pm the US release consumer confidence and housing price index. Wednesday brings in the merry month of December and along with it a refresh of the global economic data and how those economies are faring as the recovery from the Coronavirus continues. With inflation a decade high in the UK it is expected the Bank of England to raise interest rates in the UK, which is likely already priced into the market, should they choose again to hold rates this could cause dismay for the Pound and a repeat of last month’s 2 cent drop.