At the end of last week, the Pound went on the defensive as the news of a drop in trade between the UK and the EU placed pressure on the currency.
Figures state that exports had dropped by as much as 40% during January with the economy shrinking by 2.9% at the same time. This week, investors will have an eye on the latest Bank of England policy meeting but at the end week the currency finished at 1.1645 against the Euro and 1.392 against the US Dollar according to the Foreign Exchange Market.
The Euro nudged higher on Friday with investors embracing the stronger-than-expected industrial production figures. Despite this, the gains were capped as a result of the negative correlation with the US Dollar. This week, the ZEW surveys from Germany will be the main focus for investors as they look for improvements in the biggest economy in Europe.
It was a solid end to the week for the US Dollar as it soared at the same time as US Treasury yields. This followed news that every adult in the US would have their vaccine by May, raising hopes that the economy would reopen sooner than expected. Furthermore, the US consumer sentiment index also saw household sentiment increase to levels seen before the pandemic and that helped to reinforce the US Dollar rally.