- GBP jumps after morning’s ecostats – Better-than-expected sales results arrive
- ‘Brexit’ warning from former Chancellor – Alistair Darling voices concerns
- Euro slides on poor ecostats – Falling construction activity alarms investors
- ECB and BoE contributions due shortly – Policy minutes and Vlieghe speech due
The Pound Sterling has been a solid option for investors recently, having largely repeated yesterday’s extremely positive movement against the bulk of its peers.
The Euro has been decidedly less appealing, having been limited by recent construction output stats.
UK Economic News: Rising Retail Sales Cement Pound’s Status for Investors
The Pound has performed exceptionally well against almost all of its currency competitors lately, owing to the outcome of UK retail sales stats for April. Forecasts had been generally optimistic to begin with, but the Pound was sent rallying when it turned out that all prior predictions had been greatly exceeded.
Notably, the Pound actually started to rise before the results had been announced, which suggests that many investors had factored in a positive outcome for the latest sales stats.
In response to the news, Office for National Statistics (ONS) Head of Retail Sales Melanie Richard said:
‘Both the volume and value of sales increased in April compared to March as lower prices boosted sales’.
Elsewhere, former Labour Chancellor Alistair Darling gave a statement in support of an ‘In’ vote for the EU Referendum, arguing that the UK could enter a recession in the event of a ‘Brexit’.
Pound gains today have included 0.4% against the Euro (GBP/EUR), 0.6% against the Australian Dollar (GBP/AUD) and 0.8% against the Canadian Dollar (GBP/CAD).
Euro Falls along with Construction Output in the Eurozone
The single currency has been a significantly poorer prospect to investors compared to Sterling, seeing losses of -0.4% against the Pound (EUR/GBP) and the Japanese Yen (EUR/JPY) and -0.5% against the South African Rand (EUR/ZAR). Notably, however, a gain of 0.5% has been seen against the Indian Rupee (EUR/INR).
The Euro has mainly been softened today by construction output stats for the Eurozone in March, which have either fallen into or remained in negative ranges on both the month and the year.
Elsewhere, French and Dutch unemployment for the first quarter and April respectively has remained unchanged.
Future GBP, EUR Forecast: ECB Accounts and BoE’s Vlieghe’s Speech Incoming
The rest of the day is likely to bring only two major pairing announcements, with the first coming from the Eurozone.
This will be the European Central Bank (ECB) monetary policy meeting accounts, which are due in the early afternoon and could give some indication as to what the ECB is considering for future policy movements.
From the UK will be a speech from (relatively) new Bank of England (BoE) official Gertjan Vlieghe, which is due to take place this evening at the London Business School.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3057 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7659 today.
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