The Pound has weakened as indications that lockdown restrictions will be extended has caused further concerns about what its economic impact might be. In addition, UK retail sales data released this morning showed a figure of 0.3% compared to 1.4% that was forecast which disappointed the market. On an annual basis, retail sales fell by 1.9% in 2020 which represents its largest decline since records began in 1997.
The Euro has seen some renewed strength against both the Pound and the Dollar. ECB President Lagarde suggested that the central bank might not use all of its €1.85 trillion PEPP programme if finances are stable. There was also little mention of the Euro’s recent strength and its negative impact on inflation.
US unemployment claims came out at 900K compared to 930K that was expected. This in turn alleviated labour market concerns for the time being which led to a continued lack of demand for the Dollar’s safe-haven status. President Biden also signed a number of executive orders to bring coronavirus cases in the US under control.