The Pound has tumbled to its weakest level in more than four months against the Euro after economic data showed that UK shop prices declined for a third consecutive month.
Sterling fell to €1.1446 against the Euro
Against the US Dollar, Sterling weakened for a fourth day as investors wait for the Bank of England’s latest policy decision which will be the second made by new governor Mark Carney. They are expecting that the Bank’s nine member Monetary Policy Committee will choose to maintain the £375 billion pound bond purchasing programme. They are also expected to maintain interest rates at the record low level of 0.5%.
According to the British Retail Consortium the Nielsen Shop Price Index fell by 0.5% in July from the previous month’s fall of 0.2%. As a result the Pound fell against the common currency for a seventh day, marking its longest losing streak since January 2013.
The Euro was also supported against the Pound due to the release of data showing that the number of Germans out of a job declined by 7000, leaving Europe’s biggest economy with a 6.9% unemployment rate.
“This is a positive surprise. The dip that we saw between March and May is being ironed out. The labour market is in a solid position. The early indicators have improved recently. Employment will probably increase. It’s not unusual that the momentum is not that great given its high level.
This is positive for the domestic economy, especially for private consumption. That will be increasingly significant in a global climate that is not very straightforward” said Steffen Schilbe of HSBC.
The positive jobs data largely ignored data showing a decline in German retail sales. The Pound could find some support against the Euro later in the session if the overall Eurozone unemployment data comes in worse than expected. This seems less likely than in previous months as Spain and Italy see improvements to their jobless rates.
Current Pound Sterling (GBP) Exchange Rates
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5214 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1442 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6832 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9025 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6573 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8734 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5939 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5253 >
(As of 09:45am GMT)
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