Pound Euro Exchange Rate Traded Erratically on Slipping Retail Sales
The Pound Euro (GBP/EUR) exchange rate is fluctuating after retail sales in the Euro area printed far below expectations.
At time of writing the GBP/EUR exchange rate is trading around €1.1306, relatively unchanged from this morning’s opening levels.
Euro (EUR) Softens amid Poor Retail Sales
The Euro is coming under pressure this morning as retail sales missed forecasts and printed lower than expected.
On a monthly basis, retail sales increased by 0.3%, against an expected 1% climb. Despite increased retail trade from the previous month, the retail remains in shaky territory. On a yearly basis, sales declined by 2.3%, marking the fourth straight month of contraction.
Elsewhere, European Central Bank (ECB) President Christine Lagarde reiterated on Sunday that inflation looks to remain high in the short-term, emphasising the need for further rate hikes. EUR investors were buoyed on this rhetoric. However, a more cautious approach was shown from ECB Governing Council Member Mario Centeno. Quoted this morning saying that the central bank’s monetary policy must now be based on data, Centeno told La Stampa:
‘We need to look very carefully at what the March forecast will be. This is the most important data we will have to guide our future decisions.’
Pound (GBP) Quiet amid Domestic Woes
The Pound is relatively subdued this morning amid a lack of economic data. However, the downward pressures of domestic issues could continue to keep a lid on proceedings today. Continued growing pessimism of the post-Brexit trade deal could be sapping demand once again.
Elsewhere, the CEO of energy giant Shell has warned that the United States is far more attractive than the UK for energy investment. Wael Sawan, the new CEO for Shell, told The Times that the UK’s focus on windfall taxes and planning delays all make the UK a far less attractive market. The ongoing economic uncertainty surrounding the UK could continue to weigh on GBP investors’ minds, and in turn, the Pound.
Pound Euro Forecast: BRC Retail Sales Report to Boost Sterling?
Looking ahead, the Pound Euro exchange rate could see further movement with the first data release of note for the UK this week. The British Retail Consortium (BRC) is set to release the February retail sales report. An expected 4.8% increase YoY could see the Pound climb on the steadily improving retail sector.
Meanwhile, the Euro will be trading on market sentiment until employment and GDP growth data prints on Wednesday. Further headlines out of Ukraine could influence the Euro in the meantime.