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Below is quote On New Covid-19 wave in Europe to thrash both: Economy & Currency by Heena Naik, Research Analyst - Currency, Angel One Ltd

After suffering almost for two years by the Covid-19 hit, the European Union heaved a sigh of relief. Most of the shut businesses that were once shut, were reopened again lighting the livelihood of the common man. Economic activities were on the rolling once again. Equities and the Euro currency were seen reversing their losses as well. But there is a popular saying ‘Nothing is more permanent than the temporary’ which holds true to its words. A fresh wave of Covid has once again hit the Union, bringing a lot of chaos in the member nations and financial markets including currencies.

As per Reuters’ – Coronavirus tracker, the average number of new infections that reached new highs were reported in the following mentioned member nations such as Netherlands, Austria, Greece, Czech Republic, Norway, Finland, Germany, Slovakia, Hungary, Denmark and Luxembourg. Apart from the growing number of fresh cases, the government of many member nations have another headache to deal with and that is to convince its people to get fully vaccinated which has gone to deaf ears.

After a number of meetings, many member nations have resorted to measures to protect the hospitals from getting overcrowded and also curbing infections. They have targeted only the unvaccinated this time; imposing full restrictions which has led to protests and riots across the Union as people are refusing to follow them.

The government have come up with 2G rule and 3G rule while imposing restrictions. For example, countries like France and Italy have restricted access to bars, restaurants and public places to those who have been vaccinated or have recently recovered from the disease or tested negative. This is the 3G rule. On the other hand, countries like Germany has excluded completely from entering some public places to even those who have been tested negative. This so called rules has been seen as a complex and unjustified measure to the locals who feel that it’s unfair to those who have taken timely jabs.Demonstrations were held in some parts of the European Union after the government announced a new lockdown and mandated getting the Covid 19 vaccine for everyone. Shops, bars and businesses such as hairdressers were overwhelmed in anticipation of the lockdown that will see all nonessential businesses shuttered.

All of these factors impacted hugely on EURUSD and EURINR which plunged by more than 2 percent since the start of November’21 until now. It touched the lower levels of 1.1233 and 83.51 respectively. There is a possibility that this fall in the shared currency is likely to continue for some more time. EURINR (CMP: 83.62) is likely to move towards 82.80 – 82.50 levels by the end of next week i.e. 3rd Dec’21.

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