EUR/GBP Exchange Rate Soars to 2018 High as UK Retail Sales Disappoint
The Euro Pound (EUR/GBP) exchange rate roared higher this morning, as the UK’s run of poor economic data continued with the publication of the country’s latest retail sales figures.
At the time of writing EUR/GBP exchange rate is currently up by around 0.3% this morning, with the pairing striking its highest levels so far this year.
Surge in Euro Pound (EUR/GBP) Exchange Rate Set to Continue as BoE Rate Hike Now it Doubt?
The Euro Pound (EUR/GBP) exchange rate is currently on track for its best week of trade since April as a run of poor data has poured water on hopes that the Bank of England (BoE) will push forward with plans to raise interest rates in August.
The latest setback comes in the form of the UK’s latest retail sales figures, with the ONS reporting that sales growth slumping from 1.4% to -0.5% in June.
This saw sales growth fall well below forecasts of a more modest slowdown to 0.2% and the worst reading since the snow disrupted stores back in March.
Kathleen Brooks, research director of Capital Index, summed up the current mood surrounding Pound and the dampen expectations of a rate hike next month:
‘Although retail sales figures can be volatile, there is a growing sense that the UK economy is slowing down sharply, and with the political backdrop deteriorating, the Bank of England needs to have a pretty solid reason for hiking rates when it meets next month.’
A decision by the BoE to delay next month’s rate hike could be disastrous for Sterling, with the bank’s U-turn on a May hike having written off two cents from the GBP/EUR exchange rate.
EUR/GBP Exchange Rate Forecast: ECB in Focus, Can Upbeat Outlook Strengthen the Euro?
Following on from this week’s rather muted performance by the Euro, markets are hoping for some more notable movement next week in the face of the European Central Bank’s (ECB) latest policy meeting.
While the bank is not expected to make any changes to monetary policy in its July meeting, it may still be of some note should policymakers take the chance to give some greater guidance on its plans to wind down its quantitative easing programme by the end of 2018, something which may prompt further gains in the EUR/GBP exchange rate.
Meanwhile the Pound may come under further pressure as Brexit negotiations get back underway, with observers fearing the recent political turmoil in Westminster could undermine the UK’s negotiating position.