Pound Depreciates On New Covid-19 Variant Concerns
November 26 2021 - 3:19AM
RTTF2
The pound fell against its most major counterparts in the
European session on Friday, as the emergence of the South African
variant sparked growth concerns, prompting traders to reduce their
expectations about the possibility of the Bank of England rate hike
in December.
Traders are assigning only a 55 percent probability of 15
basis-point rate hike at the December meeting, down from odds of 75
percent seen on Thursday.
Global markets fell, as investors worry about the spread of new
COVID-19 variant and its impact on the global economy.
Several countries, including the U.K. tightened restrictions on
travel from the southern African region due to the variant of
concern.
The U.K. has temporarily suspended flights from six African
countries and imposed quarantine on travelers arriving in the
U.K.
UK Health Secretary Sajid Javid said that the variant pose great
concern and is likely to be more transmissible as well as vaccine
resistant.
The pound touched a 10-day low of 0.8477 versus the euro, down
from yesterday's close of 0.8406. The pound may locate support
around the 0.86 level.
The pound weakened to 1.2319 against the franc, its lowest level
since November 12. If the pound falls further, it may test support
around the 1.21 level.
The pound dropped to its weakest level since October 7 against
the yen, at 151.08. The pound is likely to challenge support around
the 149.00 level.
The pound dipped to more than an 11-month low of 1.3278 against
the greenback around 3:05 am ET, but it has since rebounded to
1.3341. The pair had closed yesterday's deals at 1.3318.
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