EUR GBP Weak as Sterling Sees Safe Haven Gains

The EURGBP exchange rate was back near the recent lows after the pound sterling saw safe haven gains. Stock markets are under pressure as traders sweat about the tightening of policy by the US central bank. The pound will move on UK retail sales today, while UK ministers are looking at cutting the coronavirus isolation period to just five days.

The EUR to GBP rate was trading at 0.8344 with recent lows at 0.8332.

UK retail footfall drops with holiday restrictions

UK retail sales will be released today with recent figures showing a drop in footfall over the festive season. Footfall at UK outlets dropped last week, with Central London seeing the biggest decline due to the work from home guidance, according to data released on Monday by Springboard.

Footfall was 6% lower than the week before, with Central London seeing a 25% slump. The decline on high streets was more modest, with market towns down 2.8% and 2% higher in Outer London.

Springboard said that despite work from home guidance, it was clear that some employees did venture back to the office. The overall 6% slump was driven by high streets, which saw a 10.9% decline and shopping centres, which saw a 4.4% fall.

Springboard said that Footfall at UK retail destinations was still much lower than in the same week of 2019 – down 21.8%.

Diane Wehrle, Insights Director at Springboard said: “Somewhat inevitably – given that last week was the first return to work for many after the Christmas and New Year period, footfall declined from the week before. Indeed, this is a familiar result in the first week of the year, having occurred every year since 2011, and the magnitude of the drop in footfall last week was almost identical to that in the same week in 2019 and slightly lower than in the same week in 2020.”

The UK Prime Minister is reportedly looking to cut the UK’s virus isolation time to only five days. Rishi Sunak supports the move and that could provide a shot in the arm for the UK economy.

European and UK ministers are now talking of the potential for the virus to soon be classed as an endemic, with less need for testing and restrictions.

Nato talks of ‘important week for European security’

NATO Secretary General Jens Stoltenberg called Ukraine “a valued and long-standing partner” with the right to choose its own path. He said that Monday’s meeting marks “the start of an important week for European security”, which includes a meeting of the NATO-Russia Council on 12 January.

However, Russian Deputy Foreign Minister Sergei Ryabkov has said that the talks between Russia and the West could end as soon as today if the US and NATO are not willing to show ‘flexibility’.

Today’s meeting will be followed by Russia-NATO talks in Brussels on Wednesday, before a meeting in Vienna of the Organisation for Security and Cooperation in Europe later in the week.

There is still a risk for the euro if tensions escalate after European gas prices have soared last year on the hostililties.

The post EUR GBP Weak as Sterling Sees Safe Haven Gains appeared first on Euro Rate Forecast.