The Pound was given a boost on Friday morning with better than expected retail sales data with a release of 1.2% compared to -0.3% that was forecast. Chancellor Sunak has said that there has been progress during post-Brexit trade negotiations with the EU and hopes that a deal can be agreed to. This also helped boost Sterling across the board even though EU negotiators have told Eurozone leaders that the three main sticking points of fisheries, state aid and competition remain unresolved.
This morning, both French flash manufacturing and services PMI figures disappointed the market with worse than expected results. However, German flash manufacturing PMI data beat forecasts at 57.9 compared to 56.0 that was expected whilst services data was roughly as anticipated. The Euro has lost ground against a strong Pound but has made some gains against a weaker Dollar.
The Dollar has continued to weaken as pressure has mounted for the Federal Reserve to take further monetary action to stimulate the US economy. The latest FOMC meeting minutes will be closely looked at on Thursday for any indication that the central bank could potentially take action next month. News that coronavirus vaccines could be distributed earlier than expected created optimism in the market which in turn undermined the Dollar’s safe-haven status.