Pound Euro Exchange Rate (GBP EUR) Gains Following Strong UK Retail Sales And PMI Services Data

March 5, 2013 - Written by Tim Boyer

STORY LINK Pound Euro Exchange Rate (GBP EUR) Gains Following Strong UK Retail Sales And PMI Services Data

A brace of positive UK data releases has caused the Pound to be one of the best-performing of the sixteen most-actively traded currencies today. The overnight session brought the release of the latest British Retail Consortium (BRC) annualised Retail Sales data. The UK shop sales numbers for last month revealed that like-for-like transactions had increased by a healthy 2.7% compared to the same month a year before. Cynics were quick to point out that January had been a particularly poor month for British retail sales thanks to inclement weather conditions and a bounce in February was to be expected. Notwithstanding this, the highest showing for the figure since the end of 2009 spells good news for the Pound.

February’s PMI Services sector survey, which was published later on this morning, provided further grounds for optimism for investors holding Sterling-denominated assets. The data revealed that the UK’s combined tertiary industry expanded at its fastest pace since September of last year during February. The PMI Services survey is always closely-watched by investors because of the British economy’s heavy dependence on the services industry. The latest figures suggest that over three quarters of economic activity in the UK comes in this sector.

On a less positive note for the Pound, UK Chancellor George Osborne attended meetings in Brussels earlier today aimed at renegotiating eurozone lawmakers’ proposals for limiting investment bankers’ bonuses. The sight of Osborne heading into Brussels to ‘fight Britain’s corner’ served as a stark reminder of the UK’s isolated position in Europe. Many analysts have suggested that, with the British economy teetering on the edge of an unprecedented triple dip recession, now is not the time to be distancing Britain from its primary trading partner. In spite of Osborne’s day trip to Brussels, the Pound has more than held its own against the euro on the day; the current Pound Euro exchange rate stands at 1.1628, up by 0.18% on the session.

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