GBP/EUR Exchange Rate Steady’s on Robust UK Retail Sales
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in a narrow range this morning, following the release of the UK’s latest retail sales figures.
At the time of writing the GBP/EUR exchange rate is virtually unchanged from its opening levels today, after briefly fallen 0.2% earlier in the session.
Pound Sterling (GBP) Stable as UK Retail Sales Jump
The Pound (GBP) is holding its ground against the Euro (EUR) this morning following the release of the some positive UK retail data.
According to data published by the Office for National Statistics (ONS), UK retail sales climbed by 0.7% last month after contracting 0.5% in June helping to buoy Sterling sentiment this morning.
This outpaced forecasts of a more modest rebound to 0.2% but was still way behind the 1.4% rise in sales growth seen in May.
The ONS reported that the recent heatwave continued to impact sales last month, with footfall in high street stores remaining weak as people looked to enjoy the sunshine.
Sales growth last month was instead dependant on online sales, with online spending reaching a record high in July thanks to a number of discounts being offered by online retailers, while strong demand for food and drink also helped contribute to the uptick in sales.
Rhian Murphy, Senior Statistician at the ONS said:
‘Many consumers stayed away from some high street stores in July, but online sales were very strong, supported by several retailers launching promotions.
‘Food sales remained robust as people continued to enjoy the World Cup and the sunshine.’
Euro (EUR) Exchange Rates Firm as Turkey Fears Cool
The Euro (EUR) meanwhile, began trending higher against the Pound (GBP) and many of its other peers this morning thanks to the Turkish Lira’s (TRY) modest recovery over the past couple of days.
After striking record lows on Monday, the Lira has begun to creep back up, helped in part thanks to measures by Turkey’s central bank to squeeze Lira liquidity.
This in turn has aided in reducing fears that Turkey’s financial woes could spill over into the Eurozone and lent support to the Euro this morning.
However the real test for the Lira is yet to come as, Turkey’s recently appointed finance minister, Berat Albayrak will need to convince international investors in a conference call later this afternoon that Ankara is prepared to make difficult decisions in order to quell inflation.
GBP/EUR Exchange Rate Forecast: Euro to Remain Flat Despite Rising Inflation?
Looking ahead to Friday’s session, the Pound Euro (GBP/EUR) exchange rate looks to close the week in a narrow range despite an expected rise in Eurozone inflation.
Economists forecast that Friday’s Consumer Price Index (CPI) will confirm that Eurozone inflation ticked up from 2% to 2.1% in July.
However with the European Central Bank (ECB) pledging to leave interest rates on hold until at least the end of summer next year, there is little upside to the rise in inflation in the eyes of EUR investors.
Meanwhile, barring any major Brexit developments the Pound may also struggle to make any headway tomorrow as an absence of UK data provide little catalyst for movement.