- Pound (GBP) rise on encouraging vaccine statistics
- BoE’s Andrew Bailey to speak at World Economic Forum
- Euro (EUR) broadly supported by weaker USD
- German IFO business sentiment data in focus
The Pound Euro (GBP/EUR) exchange rate is advancing, paring losses from Friday. The pair settled on Friday -0.35% at €1.1245. Yet despite the steep loss on Friday the pair broke even across the week. At 05:15 UTC, GBP/EUR trades +0.2% at €1.1260, the top of the daily traded range.
The Pound is advancing at the start of the new week on covid optimism as cases in the UK fall again and as the number of vaccinations hit 6.3 million. The number of new covid cases fell a further 22% over the week with 30,000 cases reported on Sunday.
Whilst the vaccination distribution is making progress, the health minister Matt Hancock said that the UK is still a long way from easing lockdown restrictions.
The Pound was hit by poor data at the end of last week. UK retail sales rose less than expected in December climbing just 0.3% month on month even though shops reopened after the November lockdown. This was significantly lower than the 1.2% increase that analysts forecast.
The weaker than predicted readings comes following a downwardly revised 4.1% contraction in retail sales in November when sales were hit by store closures in the second national lockdown.
There is no high impacting UK data to be released today. Attention will fall on Bank of England’s Andrew Bailey who will be speaking at the World Economic Forum. Any comments on negative rates will be eyed.
The Euro has been well supported in recent weeks by the weaker US Dollar. US stimulus optimism as Joe Biden takes office has been dragging on the greenback, lifting the Euro despite surging covid cases & tightening lockdown restrictions in the bloc.
Attention will now turn to the German IFO business sentiment survey which is expected to show a deterioration in the current assessment but an improvement in expectations in January, increasing from 92.8 to 93.2. An upbeat print could underpin the common currency.