After some modest gains by GBP over the last few days off the back of rising inflation and a potential interest rate rise, the pound has lost some footing against the USD this morning and dropped down, nearing the 1.3400 mark. The EUR has struggled against the USD, dropping under the 1.1300 barrier at time of writing, again reaching near year and a half lows.
Retail sales released this morning from the UK showed sales increased by 0.8%, coming in 0.3% higher than originally forecasted but has done little to stem the drop off against the USD. Reports of Austria going back into a full lockdown are weighing on the EUR. Germany’s health Minister Jens Spahn has also aired his worries over the rising Covid cases in the country, quoting that Germany ‘are in a national emergency’. The USD is benefiting from its safe-haven status and the risk-off sentiment globally.
Today’s market calendar is quieter on data releases so a close eye will be kept on Brexit negotiations in Brussels. Simon Coveney, Ireland’s foreign minister said yesterday that the UK’s lack of willingness to compromise on the Northern Ireland protocol was ‘deeply disappointing’ though an agreement is certainly looking more likely than this time a few weeks ago.
Have a great weekend.
Thomas Read, Senior Relationship Manager.
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