- Pound (GBP) declines as covid cases remain elevated
- BRC LFL retail sales data +7.9%
- Euro (EUR) declines as US Dollar surges
- EZ industrial production on Wednesday
The Pound Euro (GBP/EUR) exchange rate is building on gains from Monday . The pair settled +0.2% higher in the previous session at €1.1122, towards the top of the daily traded range. At 05:15 UTC, GBP/EUR trades +0.2% at €1.1148, the high of the day.
The covid pandemic remains front and central for Pound traders as Prime Minister Boris Johnson warned that the UK was in a race against time to roll out Covid vaccine. The death toll hit a record high and hospitals are running out of beds and oxygen, yet the pound islooking through these issues and focusing on the accelerating vaccine rollout.
In parts for London up to 1 in 20 people are infected as the more contagious variant of the virus spreads. The death tolls now exceeds 81,000 and the government is weighing up tougher restrictions in an attempt to slow the spread of the virus.
BRC like for like retail sales data revealed that sales grew 4.9% year on year in December, down from 7.7% in November.
The is no further UK economic data due to be released today. Attention could turn to BoE’s Ben Broadbent who is due to speak later today.
The Euro weakened across the board on Monday owing to the newfound strength of the US Dollar and weak Spanish data.
Spanish industrial production contracted by a largest than expected -0.9% in November, hitting demand fir the common currency. On an annual basis output dived -3.8% reflecting the ongoing impact of the Covid 19 crisis.
There is no high impacting Eurozone economic data due to be released today. However, should Wednesday’s Eurozone industrial production data underwhelm, the Euro could take another leg lower.
Any signs that the region’s economy could be heading for a double dip recession could unnerve Euro investors. Particularly given that several countries in the bloc are tightening lockdown restrictions in Q1 2021.