Pound Steady as UK Retail Sales Disappoint
The Euro to Pound exchange rate held steady today, with the pairing currently fluctuating around £0.87.
Sterling held steady against the single currency following the publication of the British Retail Consortium’s (BRC) retail sales data for January, which beat forecasts and rose to 7.1%.
However, retail sales were notably slow in January, with the figure reflecting the slowest rate of growth since May last year.
Helen Dickinson, the BRC’s Chief Executive, commented:
‘January saw retail sales growth decline to its lowest level since May of last year. The current lockdown has hit non-essential retailers harder than in November, with the new variant hampering consumer confidence and leading customers to hold back on spending – especially on clothing and footwear.’
Meanwhile, GBP investors are becoming increasingly concerned about the Covid-19 pandemic, with the proportion of deaths in England and Wales hitting an all-time high.
Nevertheless, daily cases continue to drop, with today’s cases down by -4,476 compared to last week, and 18.9% of the British pubic having received the first dose of the coronavirus vaccine.
Euro Steady as Germany’s Exports Rose in December
The Euro failed to rise against Sterling today despite Germany’s latest export figures beating forecasts and rising by 0.1%.
Analysts at Reuters commented on the data:
‘German exports rose in December as solid trade with China and the United States helped Europe’s largest economy as it struggles to grow under the restrictions of a lockdown aimed at suppressing the COVID-19 case load.
However, with signs of the German economy, which is the largest in the Eurozone, recovering, EUR investors are becoming more confident.
EUR/GBP Forecast: German Inflation Data in Focus
Euro traders will be awaiting tomorrow’s publication of the latest Harmonized Index of Consumer Prices for January.
Any improvement in the outlook for the Eurozone’s largest economy would be EUR positive.
Tomorrow will also see the release of December’s French Industrial Output data.
Any signs of the French economy growing would benefit the single currency.
EUR traders will also be awaiting tomorrow’s speech from the European Central Bank’s (ECB) Fabio Panetta, a member of the central bank’s executive board.
If Panetta is downbeat in his forecasts for the Eurozone’s economy, then the EUR/GBP exchange rate will suffer.
Pound traders will be eyeing the UK’s Covid-19 developments. If the vaccine rollout continues to increase, however, then Sterling would head higher.