Sterling Euro Exchange Rate (GBP EUR) Edges Lower As Fears Grow Regarding UK Retail Sector Equities

Published: Tuesday, 8 January 2013 15:00 BST - Written by John Cameron

STORY LINK Sterling Euro Exchange Rate (GBP EUR) Edges Lower As Fears Grow Regarding UK Retail Sector Equities

A raft of eurozone data released earlier today sent out mixed messages regarding the state of the combined economies of mainland Europe. The bad news for the region was that whole of eurozone Retail Sales data for November showed at an annualised -2.6% versus expectations of a showing of -2.1%. Although this represented an improvement from October’s showing of -3.2%, it still suggests that the latter part of last year brought a softening of the real economy in the eurozone.

German Factory Order data for November also disappointed, showing at -1.0% versus expectations of a -0.4% result. The key figure from Europe’s leading economy traditionally provides a leading indicator of future levels of demand for products from the Teutonic superpower’s factories. The contraction in orders from 12 months previous suggests that the early part of 2013 could bring grim news.

On a more positive note, this morning’s whole of eurozone Consumer Confidence survey showed in negative territory at -26.5. However, this was a slight improvement on November’s print of -26.6. The fact that economic participants in Europe are feeling marginally more optimistic regarding the eurozone’s future economic prospects has helped the euro make gains once more against the Pound, with the Sterling to Euro exchange rate (currency : GBP EUR) dipping down to 1.2248 earlier.

Elsewhere, its reporting season for UK companies and today’s equities session has brought disappointing news from Britain’s retail sector; Morrison Supermarkets (MRW) released results which showed that its like-for-like sales in the final 6 weeks of 2012 were down by some 2.5% on the previous year. With Sainsburys releasing its latest numbers tomorrow and Tesco and M&S publishing profit and sales figures on Friday, fears that spending by Britain’s consumers is on the slide could build as the weekend approaches, heaping pressure on the already down-at-heel Pound.

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