The Euro to Pound (EUR/GBP) Exchange rate and the Euro to US Dollar (EUR/USD) exchange rate softened but saw muted movement due to a lack of economic data releases from the UK, USA and Europe.
The Pound received some support early in the session after a mixed report released by the British Retail Consortium (BRC) showed that retail spending increased by 1.4% in October compared to the preceding year. The figure was an improvement on the previous months figure and beat the three-month average growth rate of 1%. The data showed that the home and furniture categories were the best performers over the month in October but clothes and food retailers struggled due to the warm autumn’s weather and a price war raging among the UK’s supermarkets.
Sales of food goods declined by 1.4% and reported a twelve-month average decline for a second consecutive month as supermarkets picked up the pace of their price-cutting. The main cause for the rise in retail sale spending however was down to an increase in furniture purchases and increased spending for Halloween.
‘Looking at these figures, most retailers will feel they were tricked rather than treated in October. Even the most experienced of shopkeepers could not have foreseen a heat wave at Halloween and most were left with sales that were flat at best.
Sadly, this warmer weather has left many fashion retailers with a substantial stock overhang, raising the question of earlier and deeper discounts, as we get closer to Christmas. Retailers need a nippy November to help them sell their winter stock before the seasons out. With Christmas in their sights, retailers are launching their highly anticipated festive campaigns to connect with and inspire consumers to shop with them this year. All channels will be tested to the full over the coming weeks with a careful eye monitoring the margins,’ said David McCorquodale, head of retail at KPMG.
The US Dollar meanwhile regained some ground against most major peers as economists deemed that last Friday’s Nonfarm payrolls data was not soft enough to convince the Federal Reserve to refrain from raising interest rates next year.
With no more data due for the rest of the session, we can expect the Euro to continue to experience muted trade against both the Pound and US Dollar.
Wednesday promises to be more volatile for the currency markets and the Euro in particular as the European Central Bank is due to deliver its monthly report and inflation data is due to be released in Germany and France.
Euro to Pound Sterling Exchange Rate firms on BoE report
Earlier in the session the Euro softened against the Pound on Wednesday as data showed that UK wage growth overtook inflation for the first time in five years in the September quarter. The Pound was also supported by a fairly optimistic Bank of England inflation report delivered by Mark Carney. He did however warn that inflation is likely to slip below 1% over the coming months and remain low for the coming two years.Sterling then softened as the markets digested the report.
Further losses for the Euro were restrained after Industrial production data for the Eurozone came in better than forecast. Production rose by 0.6% on both a yearly and monthly basis. The monthly figure however was below forecasts for a rise to 0.7% suggesting that weakness remains persistent in the currency bloc.
Euro Exchange Rate News:
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