Currency News and Forecast: Pound Euro Rallies to One-Year High on Upbeat UK Retail Data

GBP Exchange Rates Buoyed by Upbeat Retail Sales Figures, Pound Euro Hits One-Year High

The Pound rallied at the end of last week’s session as GBP investors welcomed a rebound in UK retail sales in February. The retail data helped push the Pound Euro exchange rate past €1.17 for the first time in a year.

Data published by the Office for National Statistics reported domestic sales growth rebounded from –8.2% to 2.1% last month, supported by strong demand for DIY and outdoor items.

Looking ahead, GBP investors are likely to be focused on UK coronavirus statistics this week as they watch for any sign that Europe’s third wave has begun to spill over into the UK.

GBP exchange rates are continuing to strengthen so far this morning, with the Pound Euro exchange rate back near its one-year highs while GBP/USD firms above $1.38.

Euro (EUR) Finds Fleeting Gains on Positive German Business Sentiment

The Euro made a brief move higher on Friday, with the single currency finding some support after the latest IFO surveys revealed German business sentiment rose its highest levels since June 2019 this month.

However, this uptick proved short lived amidst a rise of tensions between Paris and Berlin over Germany’s requirement for compulsory tests for people travelling from France.

EUR investors are likely to remain preoccupied by coronavirus developments this week, with the Euro likely to suffer if cases continue to rise throughout Europe.

US Dollar (USD) Dips on Lacklustre Data

The US Dollar was subdued at the end of last week after US data reported a larger-than-expected slump in personal spending and a surprise drop in core inflation last month.

Also limiting the appeal of the US Dollar were signs that the fall in domestic coronavirus infections may have bottomed out as infections began to creep higher again.

Turning to this week’s session, the US Dollar could find itself back in demand if market sentiment continues to be sapped by coronavirus concerns and rising geopolitical tensions.

Canadian Dollar (CAD) Firms as WTI Oil Rebounds Above $60

The Canadian Dollar (CAD) strengthened on Friday, with the commodity-sensitive ‘Loonie’ attracting support as concerns over the Suez Canal blockage propelled WTI oil back above $60 a barrel.

Australian Dollar (AUD) Drops in Risk-Off Trade

The Australian Dollar opens this week on the back foot, with investors shying away from the risk-sensitive ‘Aussie’ amidst fresh US-China tensions as well as the announcement of a local lockdown in Brisbane.

New Zealand Dollar (NZD) Undermined in Gloomy Trade

The New Zealand Dollar also fell victim to some selling during Monday’s Asian session, as investors were spooked by trade war concerns and Europe’s deteriorating coronavirus situation.

Matthew Andrews

Contact Matthew Andrews