Sterling slightly pulled back against recent lows yesterday, with markets seeing a broader recovery of riskier assets this week so far. The UK government announced yesterday there will not be a lockdown this side of Christmas but they can not rule out a circuit breaker shortly after, speculation suggests this could be as early as the 27th. Given the opposition PM Boris Johnson faced from his own party members for the initial restrictions, its likely we could see an increase in the number of Conservative MPs dissenting against the Prime Minister and voting against further measures.

Near term risk for the UK economy has weighed heavy against the Pound so far this month. A potential piece of good news for the UK is South Africa has seen the number of omicron infections drop for a 3rd consecutive day, hospital omissions have also began to slow. The hope is the UK will see a similar trend before the outbreak causes major economic damage.