Pond Euro Exchange Rate (GBP EUR) Breaks To New Nearterm Low Following Demise Of HMV

Modified: Tuesday, 15 January 2013 09:10 BST - Written by Minesh Chaudhari

STORY LINK Pond Euro Exchange Rate (GBP EUR) Breaks To New Nearterm Low Following Demise Of HMV

Last night’s announcement from British High Street music and DVD chain HMV that it has called in the administrators provided another hammer blow for Britain’s beleaguered retail sector. HMV, which has been in severe trouble for some months, employs 4,350 British workers. The news comes hot on the heels of announcements from electrical chain Comet and photoshop Jessops that they are also ceasing trading, adding to the picture that the activity levels in the UK’s high streets are slowly grinding to a halt. The HMV announcement is likely to focus investors’ thoughts on Friday’s key UK Retail Sales data for December. With Sainsburys and M&S both releasing disappointing Christmas trading numbers last month, a showing of below the anticipated annualised 2.0% appears highly possible for the shop sales figures. Such a result would heap further pressure on the under-pressure Pound.

On a brighter note, a report published yesterday predicted that a boom in the UK’s North Sea Oil sector during 2013 could generate between 40,000 and 50,000 new jobs. It should be pointed out that the report was released by oilandgaspeople.com, a recruitment agency specialising in hiring workers for Britain’s oil and gas extraction industries. Nevertheless, the prediction provides a chink of light for the UK’s struggling labour market.

Yesterday’s session saw the GBP EUR exchange rate tumble to a new 9 ½ month low at 1.2008. If this morning’s UK CPI inflation numbers print at below the expected annualised 2.7% level, then it appears likely that the pair could break down through support at 1.2000. If this is followed-up by a weak showing from Friday’s UK Retail Sales data, then the GBP EUR exchange rate could settle in a new trading range between 1.1800 and 1.2000 for the short-to-medium term, at least.

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