Euro posts third consecutive weekly loss as ECB remained cautious

At the end of the week, the pan-European Stoxx 600 closed down almost 0.2 percent, with most sectors and major indexes trading in negative territory. Retail stocks were by far the worst-performing sector, down more than 2 percent, after H&M reported fourthquarter sales below its own expectations. Shares of the fashion retailer fell almost 13 percent to their lowest level since 2009.

In Europe, leaders formally agreed to begin the second phase of Brexit talks. Prime Minister Theresa May told her counterparts she is on track to deliver Brexit. Over the weekend, the U.K.'s Finance Minister Philip Hammond is set to fly to China to seal a billion pounds worth of trade and investment deals.

The euro posted its third consecutive weekly loss as the ECB remained cautious about the prospects of reaching its inflation goals while reiterating a pledge to keep stimulus in place. The pound dropped and yields on U.K. gilts fell to the lowest since September amid speculation Brexit talks are about to get more difficult. Russia’s ruble fluctuated after the nation’s central bank cut rates more than expected.

In terms of data, euro zone trade balance numbers came in lower than expected with exports dropping 2.4 percent in October.

The European Central Bank kept monetary policy steady on Thursday, but upgraded its growth forecast for the region from 2.2 percent to 2.4 percent this year.

The Bank of England also kept its policy unchanged, a move widely expected by markets. In November, the BOE had raised rates for the first time in nearly a decade from 0.25 percent to 0.5 percent.

US stocks rose to all-time highs on Friday as expectations of a Republican tax bill passing increased. The plan will likely cut the corporate tax rate to 21 percent from 35 percent. Expectations of lower corporate taxes have helped boost stocks to record levels this year.