European stock markets traded lower Friday, ending a generally positive week on a cautious note amid concerns that growing Covid-19 cases will stunt economic growth. U.K. retail sales only grew 0.3% in December, weaker than expected, as retailers struggled to recover in the crucial holiday period from a partial coronavirus lockdown the previous month, marking a weak end to their worst year on record. Additionally, the euro-zone composite PMI, which fell to 47.5 from 49.1 in December, suggested the region was struggling to show any economic growth in the first month of the new year.
The dollar edged higher in Europe Friday, but was still heading for a lower week as traders made bets on an economic recovery from the Covid-19 pandemic. Joe Biden was sworn in as the 46th president of the United States on Wednesday, and traders are seeing the change in administration as increasing the chances of increased stimulus given the incoming president has already proposed a $1.9 trillion Covid-19 relief bill. This supported risk-on sentiment, to the detriment of the greenback, as traders were prepared to buy riskier currencies on the idea of a quicker than previously expected global economic recovery.
European stock markets are seen opening lower Friday, ending a generally positive week on a cautious note amid concerns that growing Covid-19 cases will stunt economic growth. At 2:15 AM ET (0715 GMT), the DAX futures contract in Germany traded 0.6% lower, CAC 40 futures in France dropped 0.6% and the FTSE 100 futures contract in the U.K. fell 0.4%. European Central Bank President Christine Lagarde warned Thursday that ever-increasing Covid-19 numbers and restrictive measures, such as lockdowns, to curb the spread of the virus could challenge the region’s economic outlook.