Having closed higher for the third consecutive week against its major peers , Sterling has begun the week on firm footing . The pounds gains last week came after better than expected retail sales and expectations that the Bank of England will raise interest rates for the third consecutive month at next month’s policy meeting . Meanwhile, Sterling has benefited this morning on news that the US and Russia have accepted the “ principle” of a summit over Ukraine . Foreign Secretary Liz Truss will tell the European Union today that settling a dispute over Northern Irish trade would enable London and Brussels to focus on external issues such as Ukraine . Her comments came prior to today’s meeting in Brussels with Maros Sefcovic . Vice- President of the European commission . UK PMI survey released this morning showed that Britain’s private sector picked up at the fastest pace since June 2021 this month, as spending on travel, leisure and entertainment rose after an easing in the Omicron wave of coronavirus cases .

The euro came in for support against the dollar in early trading , amid “ risk “ on mood which led to broader greenback weakness . Market sentiment improved when the White House confirmed that US President Biden and Russian President will meet following the G7 meeting this week , so long as there is no invasion of Ukraine . The development revived optimism that the conflict could be solved through diplomacy . Purchasing Managers index’s showed improving demand for services pushing business activity across Germany’s private sector to a six-month high in February , and while manufacturing lagged due to Covid infections among staff it also showed signs of recovery.

Escalating geopolitical tensions over the weekend with Russia and Belarus extending military drills in the eastern part of Ukraine helped the dollar find support in far-east trading , however news of President Biden accepting to meet his Russian counterpart Putin , provided relief, and allowed risk flows to return easing the greenback’s demand . As the US celebrate president’s day with a public holiday and no economic data due , risk flows will dictate the dollar’s trading direction .

Economic Calendar
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