GBP EUR Exchange Rate Strengthens as Retail Sales Rebound

November 16, 2017 - Written by John Cameron

STORY LINK GBP EUR Exchange Rate Strengthens as Retail Sales Rebound

The Pound Euro (GBP EUR) exchange rate has risen today as markets welcomed an uptick in UK retail sales last month.

Pound (GBP) Advances as Retail Sales Rebound

Sterling sentiment was bolstered this morning as data showed that UK retail sales picked up again last month after plummeting in September.
According to figures published by the Office for National Statistics (ONS), UK retail sales growth rose to 0.1% in October, rebounding from -0.6% the month before.
Despite this ONS economists remain confident in the prospect of a persistent untick in sales as they suggest there is underlying evidence pointing to future growth.
Kate Davies, a senior statistician at the ONS, said;
‘We are continuing to see an underlying picture of steady growth in retail sales, although this October suffered in comparison with a very strong October in 2016.’
‘Growth month-on-month in October was particularly strong in the second-hand goods sector, which includes auction houses and antique dealers.’
However some analysts suggest it may be too early for rejoicing as sales growth remain tepid and the financial pressures of both soaring inflation and weak wage growth are likely to weigh on consumer spending over the coming months.
In a note released today the British Retail Consortium said;
‘These figures suggest retail sales held up better in October than other sources have suggested, however there is still little cause to start the Christmas celebrations.’
‘Consumers are clearly feeling the squeeze, with sales down year on year and spending being directed into the second-hand market. It is therefore, vital that the chancellor does not add to the pressures on UK households’ finances in his upcoming budget.’

Euro’s (EUR) Weakens as French Employments Figures Disappoint

Meanwhile the Euro slipped earlier this morning following the release of France’s latest labour report.
According to data released by France’s national statistics agency, INSEE, unemployment in France rose from 9.5% to 9.7% in the third quarter, in line with market expectations.
While this was the first rise in joblessness in over two years it will do little to allay concerns over France’s stubbornly high unemployment and the drag it is having on the Eurozone’s second largest economy.
The stats will also be a blow to President Emmanuel Macron, who has made tackling high levels of unemployment one of the key goals of his presidency.
To this end Macron is attempting to overhaul France’s strict labour laws, something that has seen his polling numbers tumble as he faces fierce resistance from labour union.

GBP EUR Forecast: Brexit Uncertainty to Weigh on Sterling?

Looking ahead a lull in UK data until next Tuesday is likely to weigh on the GBP EUR exchange rate over the coming day’s especially if it causes investors to turn their focus towards Brexit.
With signals that talks are stalling over the terms of the UK’s exit from the EU it is increasingly looking like the EU will again vote to delay the start of trade discussions when EU leaders meet for the latest EU summit in December, something that is likely to dent the appeal of the Pound.
Antje Praefcke, a senior currency strategist in Frankfurt at Commerzbank AG said;
‘Due to a lack of momentum from other sources Sterling remains at the mercy of the slow-moving Brexit negotiations, The reaction to the dwindling chances of an agreement between the U.K. government and the EU illustrated just how sensitively Sterling reacts. Whichever way one looks at it, I really see no reason to buy Sterling.’
Meanwhile the Euro may weaken tomorrow following a speech by European Central Bank (ECB) president Mario Draghi should he reaffirm the bank’s commitment to leaving interest rates on hold for the foreseeable future.

Current Interbank Exchange Rates

At the time of writing the GBP EUR exchange rate was trending around 1.1206 and the EUR GBP exchange rate was trending around 0.8925.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts