Pound Euro (GBP/EUR) Exchange Rate Muted as German Economy Comes to ‘Complete Halt’
The Pound Sterling Euro (GBP/EUR) exchange rate edged 0.4% higher, leaving the pairing trading at around €1.0919.
The single currency slipped this morning following the release of disappointing German consumer confidence data.
GfK revealed that confidence plummeted to a lower-than-forecast 2.7 in April. This was the lowest level the index has fallen to since the global financial crisis.
Commenting on this morning’s data, GfK’s consumer expert, Rolf Bürkl said:
‘In light of the current development, we are withdrawing our consumer forecast of one percent growth for 2020. Retailers, manufacturers and service providers must prepare for a recession.
‘How severe this recession will be will ultimately depend on when the economy finds its way back to normality. A reliable forecast regarding consumption can only be made once we can predict how long the protective measures to combat corona will remain in place.
‘As a result of the wide spread of the virus and the associated restrictions, the German economy has come to a complete halt in a very short space of time.’
Sterling (GBP) Flat as Retail Sales Hit Seven-Year Low
The Pound remained under pressure today after weak UK retail sales data showed February’s growth stagnated.
This was the weakest performance since 2013 and before what is expected to be the largest fall in sales due to the coronavirus pandemic.
The Office for National Statistics (ONS) Annual sales showed zero growth in February, following a 0.9% increase just a month earlier. Added to this, month-on-month sales plummeted by -0.5%.
Commenting on this, Rhian Murphy, ONS statistician said:
‘Retail sales continued to decline in the latest three months due to weak sales across most store types, with February’s bad weather and flooding impacting on footfall.
‘A small number of retailers also said that the impact of the coronavirus had affected sales of goods shipped from China.’
However, Sterling was able to edge higher against the Euro this morning ahead of the Bank of England (BoE) rate decision.
Pound Euro Outlook: BoE Rate Decision in Focus
Looking ahead to this afternoon, the Pound (GBP) could edge higher against the Euro (EUR) following the release of the Bank of England’s (BoE) interest rate decision.
While the BoE is expected to leave rates unchanged after last week’s emergency rate cut, if policymakers unveil further stimulus it could boost GBP.
Friday could see the single currency suffer some losses against Sterling following the release of Italian economic data.
If Italian consumer confidence and business confidence both plummet, the Pound Euro (GBP/EUR) exchange rate will edge higher.